Bits Bucket For August 9, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Rain in da Beeg apple…..good day to clean house copy music to the HD, fun stuff
RE: “It is hard to fathom why reasonable people (especially those with training and experience in financial services) could not see where this would lead.” (In yesterday’s Bits Bucket)
I am about halfway through the Countrywide Book, The Foreclosure of America (which I started reading a couple of days ago). I don’t suggest reading every word, unless you enjoy suppressing the occasional urge to gag, or you are deeply enthralled with the petty, p!ssy details of corporate politics inside a large organization.
But the parts of the book which address the perceptions of the crisis from the perspective of upper-level managers in the firm are quite fascinating. For instance, the author describes a detailed discussion with his boss about the implications of the ARMs race which commenced around 2004. The writer (who was the CMO) even claims to have predicted the company would fail and be taken over by Bank of America. That is a pretty impressive insight for someone who was not a finance geek. Yet his boss more or less brushed him off, as elevating the concern to a higher level would have been bad for business.
Conclusion: Seeing where a bad situation is leading is relatively easy compared to taking action that will turn the ship and correct the situation.
The tragic aspect of the book is that one begins to realize that it did not really dawn on employees at lenders like Countrywide that the type of lending practices in which they were engaged would financially ruin millions of Americans until it was too late. They were all indoctrinated with Mozilo’s mission to turn every adult American into a homeowner.
And I am quite sure that Mozilo believed in it himself. The author quotes from one of his personal encounters with the CEO: “Any new way to help bring homeownership to our customers is very welcome at Countrywide. I am counting on you to help us with our mission, and I am looking forward to seeing you do a great job.”
The only problem: The notion that everyone, regardless of circumstances, should own a home is patently absurd, and the relentless use of government policy (especially subsidies) in pursuit of this unattainable objective has brought our country to the brink of financial ruin.
Professor Bear writes, “And I am quite sure that Mozilo believed in it himself. The author quotes from one of his personal encounters with the CEO: “Any new way to help bring homeownership to our customers is very welcome at Countrywide. I am counting on you to help us with our mission, and I am looking forward to seeing you do a great job.”
That’s a nice party line to have, but I don’t doubt for a minute that Mozilo knew exactly what was eventually going to happen to Countrywide. Of course, he could never say it to anyone, unless he wants to be sued for everything he is worth.
If everyone one involved is making so much money that, even if they think disaster might be coming down the road, the desire to keep making money far outweighs the reasons to stop. Furthermore, Countrywide didn’t create this situation… Wall Street did. Countrywide was just a supplier along the chain, and when the music stopped they got caught with too much inventory (i.e., bad loans that were either still in the hopper or hadn’t seasoned enough to get them out of the buyback period).
“I don’t doubt for a minute that Mozilo knew exactly what was eventually going to happen to Countrywide.”
Of course he did. That’s why he sold his shares ahead of time.
“That’s why he sold his shares ahead of time.”
Bingo! Ditto for Bob Toll and many other housing bubble era REIC CEOs.
I think ownership is good goal. Sure people in school should rent and people who would not be a place more than a few years. BUT also ownership at a reasonable price should be part of the goal. Reasonable price should also mean lower transaction costs.
I agree there is nothing wrong with the basic idea that ordinary people can, or should be able, to own their own houses. A long time ago, people out in the country owned their own houses, which they mainly built for themselves. The credit system is extremely weird, and we may now experience a long period in which younger people must save up quite a lot before they can trade a large fraction of their putative future earnings for the privilege of “owning” a house. If it does go that way, house prices will continue to decline for a long time.
“I think ownership is good goal.”
For everyone?
- What about career military personnel, whose work requires them to relocate every couple of years, some times with very little warning?
- What about workers in other fields where opportunities may be prone to frequent geographic shifts, requiring relocation on short notice?
- What about those losing their jobs in the current recession, who may be prevented from seeking their best opportunities because they can’t sell their home for a price that allows them to pay off their loan?
- What about people who don’t have the financial stability or self discipline to honor a commitment to pay off a home loan?
Wouldn’t someone in any of the above groups (and probably others I haven’t mentioned) be better off renting than owning?
What about career military personnel, whose work requires them to relocate every couple of years, some times with very little warning?
+100000
In almost 18 years of service, I have never bought a house. And most of my military brethern cannot understand why. Well, some of them can now.
“Great news. Most of us have relatives or acquaintances to whom this could have happened.”
You were wise - I agree with the long-held belief that in the US, it is unwise to buy a residence unless you plan to live in it for about seven years or more. In a typical military career that means one should wait until just before or upon retirement. good move. My son-in-law has done the same and has watched some of his buddies get burned on their residential real estate “investments” along the way, these past few years.
Stpn2me — There are better wealth accumulation options for career military folks than home ownership, at least during the active part of your career. If some day you retire and have adequate savings, you will have plenty of housing options (including ownership of suitable housing for a military retiree). My wife’s uncle is retired from the military and very comfortably housed in the Portland, OR area.
“…it is unwise to buy a residence unless you plan to live in it for about seven years or more.”
Chip — I noticed our posts basically agreed after I already hit the send button. Regarding the seven years rule-of-thumb, real estate sales transactions costs get very expensive if spread over shorter time periods (unless there is a mania in progress, of course…).
PR …..You know I have been thinking about this concept of reward and punishment for a few days now ….
During my lifetime I have put a lot of energy into trying to keep my sanity and playing by the rules ,but I should of realized that the Wall Street Pirates and the La La Land people had the gig figured out far better than I .
For instance …….You got a cat like Hank Paulson who comes along and convinces sane people that if you give the Pirates of Wall Street billions and maybe trillions of dollars , they will save you ,and they want you to thank them .
Have you noticed how people never mess with La La Land people . These are the people that get the gravy . Oh ,don’t mess with that person ,they might have a tantrum or go off .
But ,because I’m sane I’m the party that gets robbed and I’m the party that the la la land people go off on . Hey …..if your in cloud nine ….your protected . They got the gig figured out ,it’s reward and punishment for being a thug or being a mad-hatter .
So maybe the trick is to act insane .Walk around talking to yourself
and the pirates and nut cakes leave you alone …hell you might even get rewarded . Have this weird glare in your eyes and you get the benefits . Why do all the panhandlers come walking up to me ?
They know I have money in the bank and I’m stupid enough to try to remain sane . I’m scared ,I got sanity written all over my face ,
so I’m a target . So ….maybe it’s time to at least act like your one of them .(Just kidding ,but hell ,the thugs and nuts have the reward and punishment thing figured out and they don’t care if they destroy the earth .)
Here is the trick. Look at the wealth distribution in the united states. It is very third world like now.
So, most of the people are just living week to week or darn close to it. The money getting shuffled around at the top doesn’t mean much to them. They have day to day problems like getting a j o b or feeding themselves. Then its on to distractions like sports or other high quality BS. So they don’t understand, don’t give a crap or are just plain dumb.
Basically Carlin had it right. We don’t have leaders. We have owners. They own us. They are holding the mortgage notes. They are first in line when the fresh dollars are handed out.
Notice how the police investigate some crimes more than others? Notice how the justice system is a joke? Its your owners imposing their will. Got us all turning on the little wheels.
Now, I’m guessing, that you aren’t really rich. Let me ask you this question. Do you have any debt? Do you have to work in the next ten years? Then you are not rich. Those guys acting crazy in LA… pozers dealing with the stress of being caught on that wheel.
The fat cats in wall street… oh yeah those are the FIRE economy rich guys. Or at least their lackeys. Rich guy is sitting on 1M in gold bars, has paid off houses in various locals where taxation is difficult. Has credit accounts only so much as he doesn’t have to carry money around. Busy calling his lawer to tell him he rapped his nanny and better get her out of the country.
Till it becomes completely clear that we can not handle paying off the debt and its clear that no one can get ahead… when that time comes… then things might change. I’m looking to see real economic output keep dropping for a few more years and the marginally attached workers start to drop out.
Of course we are dealing with that MSM blitz that the recession is over and that unemployment is not getting worse. Of course we all know that isn’t true.
The reality is the drug war is seeping across the border. It was in Colombia a decade ago. Now its here. We are having a harder and harder time containing things. Law enforcement is becomming more sporadic. We all know that more and more people are demanding free healthcare. Another sign that things are fraying.
Dealing with the panhandlers is easy. Tell them you only help through established charity, like Salvation Army. Think of it this way, you are only encouraging bad behavior by handing out money.
The rich guys, you have to realize are also just a product of the system. The part of the system that is causing this is all the debt. They are the holders of the debt. So, they sit back and collect interest for doing nothing. All that idle time and wealth leads to all sorts of immoral behavior.
The debt leads to wealth concentration. Who gets rich off loans? Not me. Not PB. Not the wizard. Yes, the holders of the debt. The true owners.
Anyhow, time to get trashed and not think for a while. Sometimes this board isn’t helping me cope.
“Yes, the holders of the debt. The true owners.”
How do the holders of the debt win when 6.5 percent of mortgages are running 90+ days delinquent (as they currently are in The OC)? I would think some kinds of debt will be very unkind to the holders in the current environment, unless Uncle Sam or some other government steps in to make the f-d debtholders whole with guarantees or other sorts of bailouts.
“Sometimes this board isn’t helping me cope.”
Suggested hair-of-the-blog hangover cure: Read the Countryside book about which I have been posting — seriously!
Realizing that at least some Countryside insiders believed they were helping the greater good has helped me work through the anger phase of the housing bubble stages of grief. Now I realize the situation is much, much worse than the MSM portrays it, but I also feel a considerable amount of compassion for the many families who are drowning in the flood waters of this financial disaster.
I still feel no empathy for the Wall Street bandits who are enjoying massive taxpayer-funded bonuses while the rest of the country suffers, though. Why shouldn’t they get to enjoy the fruits of the disaster they helped create?
PB …….I was just kidding a little above ,but ,I feel
very bad for the struggling families also ,I get calls weekly from some of them . I can cope myself ,but I know people who can’t
and they are in my face so its not like I can enjoy retirement without those calls of disaster . I shell out money to the degree
I feel I can ,but than I get another call .I set up retirement fairly good ,but I’m not so rich that I can afford to save a bunch of sinking ships . I get very nervous about what the Government is going to do next .
I am currently involved in a project at the company I work for, that to put it mildly is a disaster. It has been going on for two years, has had tens of millions of dollars poured it into it and is still years away from becoming a profitable undertaking, if that ever happens.
Unfortunately, acknowledging that reality would require many of the higher ups to admit mistakes and acknowledge that much of the money that has already been spent will never be recovered. Instead of changing course, slowing the project down and addressing some of the underlying issues, more people and more money are being thrown at it, the same mistakes are being repeated over and over again.
For those who have never worked at a large corporation it is difficult to describe how hard it is to stop these slow motion disasters. There are many people who I work with who have made reasonable suggestions on how to correct the many problems. The vast majority of the people working on it (even the managers) have acknowledged that it should be scaled down. Despite that, it continues unabated, with no changes to the underlying way it has been conducted.
For a working level employee like me, while frustrating, it really doesn’t make much of a difference. I’m assigned to a project that the company has deemed a priority and is scheduled to go on for at least another two years. It means despite the fact that I am involved in an enterprise that has become a money pit for the company, the likelihood of me getting let go has significantly decreased, at least for the next two years.
Yes, our corporate system of running the economy wastes untold millions of years, careers, and lives in order to flatter the egos of small numbers of grossly overpaid but politically connected managers.
I’ve often thought that the strongest forces in human nature are the desire to control others, the desire to gain unearned wealth, and the desire not to “lose face.” All of these elements are front and center in the situation you describe. The managers care not a fig about the phenomenal waste of human and natural resources, as producing anything of value is the least of their concerns.
This is why we will not recover from the current downturn until the death or retirement of most of the key figures in today’s business and political arenas. Unless, that is, we can build a consensus for far-reaching reform of the system.
The perverse incentives that pervade corporate life contribute to untold waste, when you combine that with human nature you end up with a system that rewards exactly the kind of behavior that it should be punishing.
We have a system that comes to conclusions and then looks for facts to support, if we can’t find “facts” we create them. Just to give you an example of how this works, business cases are done, after the decision to go forward with a project is made. If you have been assigned to do one of these business cases (which I have), unless you don’t care about your continued employment, you create a business case that is designed to justify decisions that have already been made, not one necessarily one that has any basis in reality. Am I a part of the problem, I suppose I am. I am going to along to keep my job, I am sure that many of those in the financial industry used a similar justification. Even if they knew what was being done was unsustainable, they felt powerless to stop it, so they just went along.
I’ve sometimes though of my job as being assigned to run after a pyromaniac with a box of matches, but only being authorized to stomp out the matches, not tackle the pyro and take the matches away.
What are total annual expenditures on this project relative to total corp revenues?
If I had to guess, I would say that there has been approximately $75m spent, with $0 in revenue. This is over the course of two years. The first customers were originally expected in September. This has now been pushed out until March, 2010. Who knows, when we will actually start seeing revenue.
Frank:
well you see the writing on the wall….I hope you are living very cheaply. Banking all the OT you can…I wish i had your “luck”
“If I had to guess, I would say that there has been approximately $75m spent, with $0 in revenue.”
Whoa. If it were me, I’d have a Plan B in mind. Sooner or later, management might catch on. Good thing you’re here - don’t buy a house!
Hi. I work and have worked for large organizations. It really is diversification. And it typically works. Say company A makes six big bets with new projects. Five might fail but the 6th one will be such a success that it more than cover the cost of the five losers.
But the problem is that investors are forced to fund all 6 projects (or none at all), even when it’s painfully obvious to all but the managers involved that 5 of them are going nowhere. A rational system would, at a minimum, allow individual investors to allocate their capital to the projects they choose, instead of handing their entire investments to a CEO to make the allocation.
It means despite the fact that I am involved in an enterprise that has become a money pit for the company, the likelihood of me getting let go has significantly decreased, at least for the next two years.
But after those two years, your chances of being let go will increase considerably. Eventually those big bosses will figure out it’s a lost cause. But whom will they blame? YOU, of course. Of with everyone else’s head, except their own.
Frank, I work at one of those big corps that spend millions in a project only to find out “it blows up” when it shouldn’t causing SERIOUS problems. So, what do they do, continue to make it, then warehouse the project. One major financial mistake after another and still it goes on.Then the mgr gets a promotion and a bonus. Sheesh.
What is “CMO”? Chief marketing officer?
Yes. The author (Adam Michaelson) was instrumental in elevating the Countrywide brand to global recognition, through internet and teevee ad campaigns. And he worked at Countrywide with the proud conviction that what he was doing was good not only for himself and the higher ups in his company, but for America as well. What a tragedy!
Strange. In the engineering companies I worked for, we technical people were always trying to bring the marketing dweebs back down to earth. In Countrywide’s case it sounds like the technical people were even farther down the road to insanity than the marketing people.
What I’ve seen is exactly the opposite. The technical guys shoot the moon, with we can do this and that and the other thing. They fall victim to the “cool” factor. Boy isn’t this great, this is the most technologically advanced product we can sell, without any consideration of if anyone will pay for the damn thing. In my experience many techies think that what they care about, is what our customers will care about. When our customers care about cost first and functionality second.
When our customers care about cost first and functionality second. That didn’t apply to me vis-a-vis Windows Vista vs. Windows XP. I have XP & never gave any serious thought to upgrading, XP’s functionality was just fine. I wouldn’t have gone to Vista if it had been free.
I guess I should have put it differently. If you have a product that works and is cheap, it is practically impossible (at least in my experience) to get most customers to upgrade to a new product that costs more if it offers a few more bells and whistles.
I have seen this happen time and time again where business cases are done with the assumption that customers will pay more for a product that offers whatever is considered “better” than what they currently have. These assumptions almost always turn out to be incorrect for the vast majority of customers. The product languishes until pricing is at parity with whatever it is suppose to be replacing.
“That didn’t apply to me vis-a-vis Windows Vista vs. Windows XP.”
The normal rules of competition don’t apply to 800 lb gorilla monopolists like Microsloth. Countrywide had to be very competitive to get where it got to during the boom years, as it was up against Megabank, Inc firms like Wells Fargo, Citigroup and Bank of America, not to mention regional competitors like New Century Mortgage, Accredited Home Lenders and IndyMac.
Business plans at large corporations these days:
1) Don’t screw up cash cow product lines.
2) Throw as many new initiatives against the wall as funds allow and see what sticks.
Sorry — Adam was Senior Vice President of marketing (but frequently interacted with the CMO). One gets the impression from reading the book that CFC had an army of senior managers.
Hello everyone!!! Good morning to you….
I am eating taco’s with grape Kool-Aide….Life is ok…
110 degrees today…sun is setting behind the mountains next to Kandahar…
Stpn, glad to see your post. Folks here were starting to get nervous.
In ‘Nam, guys knew to within a few days or a week how long they would be in country so most of us kept “countdown calendars.” What’s it like for the guys today- do you have a fairly firm rotation schedule or can a tour be extended indefinitely?
Take care. Keep posting.
What’s it like for the guys today- do you have a fairly firm rotation schedule or can a tour be extended indefinitely?
They try not to go past 15 months if they can help it…
We usually dont start coundown calendars until about three months out…..
Hi Step My Man!!
HOOAAH!!!
How’s it going, counsel?
How cold does it get at night Step?
Here lately its been I guess about 80 - 90 degrees. It feels like 70 being climatized….cold to me…
It’s hotter than that here in Bullhead City, AZ during the day. Kinda nice right now at dawn though. Yesterday I secured a singlewide mobile in Golden Valley. The thing that stuck me was this; why would anyone have loaned $10 against this junk? Fridge full of rotten food. If there was ever a single example of why the financial system is in a mess, it’s that little blue trailer.
“If there was ever a single example of why the financial system is in a mess, it’s that little blue trailer.”
Sounds like a good symbol of global securitization of mortgage paper. Would a local or neighborhood bank ever have lent against that property and held the paper?
I think the half-million dollar $hitholes that were being featured on Flip that House should have been an even better indicator of the size and scope of the housing mania. Those “flips” were on national TV, for all the world to see and people still couldn’t get it. None of this was hidden from public view.
I have noticed that there has been a huge rise in two crowds lately. The happy crowd is growing by leaps and bounds. The crowd of people that knew “it couldn’t last” is also growing rapidly. They didn’t know it in 2006 but their memory in 2009 says they were fully aware of what was going on. People are fools.
“I think the half-million dollar $hitholes that were being featured on Flip that House should have been an even better indicator of the size and scope of the housing mania. Those “flips” were on national TV, for all the world to see and people still couldn’t get it. None of this was hidden from public view.”
Which is exactly why the little blue trailer makes a good symbol. I think people actually believed those half-million dollar houses were worth it. But a little blue trailer with a large mortgage? That might have given some of the flipper show viewers pause.
I think about the MBS mess a lot out doing this work. I remember when the Texas bust was playing out; nobody would lend against raw land anymore. But here in AZ, the amount of foreclosed lots is staggering. And I don’t know what Wall Street was doing loaning against trailers. Used to be only the fly-by-night guys would do that.
O.P.M. - Packaging them AAA and selling them to pension plans, no?
“And I don’t know what Wall Street was doing loaning against trailers. Used to be only the fly-by-night guys would do that.”
I’ll just let that hang out there. LMAO! You made a funny, Ben.
OPM addicts don’t care who they loan to, as long as they get their fix.
I didn’t know WS did any lending against mobiles. It always seemed to me that I had no competition whatsoever (in lending on mobiles). Of course I was really lending on the HOA facilities (pool, ballroom, laundromat, etc) more than on the mobiles.
Whenever someone objected to my rates (9% or 10%), I’d say fine, go get the money wherever. And within a few weeks they’d usually be back on the phone explaining that whatever wonderful deal had appeared to be available in the conventional bankiing world was actually NOT what it appeared.
One man’s trailer is another man’s palace.
I can’t believe someone paid you to secure a mobile home!
My last encounter with a mobile home was at a bachelor party in Vine Valley, NY. We blasted it with shotguns.
‘to secure a mobile home’
Two words; insurance and liability.
Well, if that’s all they want, I could secure one of these things with about a gallon or two of gasoline..
Muggy, that’s funny. I once lived in a mobile home with a bullet hole in the living room wall.
My first wife and I lived in a mobile home, by the Interstate, in Greenville, Il., when I was in Law School. Open area, no trees, and no insulation. It also, (really) didn’t have a furnace. Well, it (furnace) was beyond a health threat.
Nice little trailer, the first night we used the oven, I cooked an 88 cent Fox pizza, and Karen and I said “What’s that smell”?
Well, as we ate the pizza, I opende up the stove, and looked under the bottom. We cooked 8-10 baby mice. But I digress. Anyway, it was cold in our little shack, wasn’t it Karen?
“I once lived in a mobile home with a bullet hole in the living room wall.”
I think they build them that way.
They had a nickname for mobile home parks in the midwest, where I grew up: “Tornado magnets.”
Yep.
NyCityBoy: Only if you ordered them special, I think. Hey, meant to ask ya, How come YOU weren’t down to see Paul on the roof, July 15? Huh?
Q:How do you turn your trailer into a Hovercraft?
A:Turn on the ceiling fans.
DOC
Fannie Mae CEO should be locked inside the blue trailer with the rotting food and left there to contemplate the fallacy of his lending decisions as the Arizona sun administers his punishment. Tell him he can come out when someone makes an offer above the value of the note he wrote on it.
Fannie has a new CEO. The one in office when that loan was probably written is long gone.
Barney Franks and Dodd should be chained inside; oh no, Barney would love it, being chained that is. hehehehehehe
tsk, tsk, tsk.
Gramm, Leach and Bliley, the monsterous thieves who created this disaster are first to the gallows.
Peter Schiff is running for Chris Dodd’s Senate seat. Did I mention that Freddie Mac and Fannie Mae gave more to Chris Dodd than any other Senator or Representative? It would be sweet, poetic justice to see Dodd turned out on his ear. Schiff is a good man and his election to the Senate would be a huge signal victory for sanity in high places.
http://www.youtube.com/watch?v=A18zTHSxGHY
Chris Dodd Vs. Peter Schiff - Freddie Mac and Fannie Mae
“…why would anyone have loaned $10 against this junk?”
I would have to guess nobody would have loaned only $10 against that junk. (sarcasm tag on )Bigger loans = bigger commissions = increased shareholder value (sarcasm tag off)
Might’a been some kind of package deal that included another property.. or maybe the trailer was collateral for some non-property purchase loan..
No, the trailer was too old for that.
I had a friend who lived in a mobile home for a while that was too old to get a mortgage. Her parents paid cash for it and she paid them a mortgage. Paid it off in five or six years.
She sold it to move into a new one in a park where you could buy the lots (as opposed to renting them.) Anyone else, I would have thought they were crazy, but it’s a nice place and she’s the type to value the older demographic. (Introvert.)
The kicker? She sold the 30+ year-old double-wide trailer with seven-foot ceilings for… wait for it…
$80K.
That was 2006, IIRC. She knew she’d never be able to sell the place later. It was in as nice condition as she could leave it, but still, $80K? For a trailer?
“That was 2006, IIRC. She knew she’d never be able to sell the place later. It was in as nice condition as she could leave it, but still, $80K? For a trailer?”
Smart girl.
my girlfriend’s grandparents bought her a used singlewide for $25k in 03′ (singlewide). I told her she would be very happy if she kept renting and just asked for the $25k to put in the bank for after the bubble implosion, i.,e. use the $25k for a down payment on a real home later.
She said she didn’t want to insult them and took the trailer. It’s an old 70’s POS. She just paid 3k+ to put in a new heater.
Other mobiles in the park were selling for $80k+ in 06′, but as you can guess, many now jus sit empty. They can’t even get takers for $30k now.
DOC
Ben, Have you ever been up near dolan springs?I think it is northeast of golden valley.I was hearing people say that was going to be a bedroom community to vegas once the new bridge was finished.
Yeah, that plan at Dolan was 100k houses as I recall, with no source of water…
Ben
I remember seeing on the news a few years ago a man and a woman (his wife?) who were going to build this huge luxury community in Golden Valley and bill it as a suburg of LV. Did anything get built?
Luxury in GV means paved roads. No, there isn’t a huge anything in GV except the expanse of nothing with trailers on 5 acre lots. This would make less sense about LV than the Kingman plan, as it is a long drive to Vegas. I still can’t figure out why people live in GV.
“…why people live in GV.”
No better option?
This is the end
Beautiful friend
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
Ill never look into your eyes…again
Can you picture what will be
So limitless and free
Desperately in need…of some…strangers hand
In a…desperate land
Lost in a roman…wilderness of pain
And all the children are insane
All the children are insane
Waiting for the summer rain, yeah….
Cmon baby, take a chance with us
And meet me at the back of the blue bus
Great song by the Doors.
Jim Morrison lived for a short time in my city, Los Altos, Ca.
His father was a HMFIC @ Moffett Field in Mountain View.
Really, SV guy? Did you ever see him/talk to him? Or, his Dad for that matter?
SV,
My grandfather help build the two aircraft hangers at Moffett Field.
That always was a scary song, Dennis. It was really good though.
All I could think about was who Ben was going to meet at the back of the blue bus/trailer.
Even though I was 12 years old when Jim Morrison broke on through to the other side, I used to know all the lyrics and bought some of his books of poetry and enjoyed reading them and wondering about the imagery. It’s simple to say the drugs provided the imagery, but there were poets generations earlier who had seemingly crazy meanings. Wallace Stevens comes to mind.
Jim Morrison’s IQ was 149 and he scored well on the SAT with a 528 in math and 630 in the verbal. Of course that was before all the drugs. He read all the classics and studied poetry at a young age when other kids were involved in non-intellectual things.
Jim Morrison was a drunken buffoon. But he did have promise. His father was the youngest admiral in the US Navy, and he was extremely well read in the classics.
First time I heard “The End” was in Apocalypse Now. Perfect for that final scene.
“Jim Morrison’s IQ was 149 and he scored well on the SAT with a 528 in math and 630 in the verbal.”
I’ve seen many, many Bi-Polars with similar stats. Unfortunately, quite often their off the chart IQ’s are inversely correlated with their self-control and common sense.
DOC
The thing that amazes me about Bullhead City is the amount of homes they built during the boom that don’t even have a view or are more than 3 miles from the Colorado River. What was in the builders minds to think they could build 250,000 houses with not even a horned toad in view for miles to add diversion to the scene. Mind boggling
Fridge full of rotten food. I sure hope you didn’t open it. The lesson of Hurricane Katrina was, never open an old refrigerator that has been sitting with food inside, just lash the door shut & haul it to the dump.
And THAT is absolutely true…
Food is nuthin’. Try opening a refrigerator full of old organic chemicals from somebody’s lab. I ran out really fast, sat on the steps, and wondered if I was going to die.
“Yesterday I secured a singlewide mobile in Golden Valley. The thing that stuck me was this; why would anyone have loaned $10 against this junk?”
Three and a half years ago, in the greater Seattle area, I was aghast at the prices mobiles on acreage were going for. The people selling were, for the most part, of little means. But, all of a sudden, it was like they were sitting on gold. I asked a realtor friend how these places were appraising, or if they were all cash sales. She said, and I quote, “the banks are appraising manufactured homes as high as stick built right now”. Unbelievable.
Ben,
I’d love to see some photos of that little blue trailer, and some history details.
Stpn - that is really hot for Kandahar, given the altitude. Hope you get some great deals on rugs while you are there. I can bargain with the merchants in Pashtu, but now am too old to travel there to do it.
But I thought all the experts said Madison WASN’T overbuilt?
A developing trend: Biggest residential construction projects are apartment buildings
http://www.madison.com/wsj/home/biz/461249
But condo inventory is at two years -
http://www.madison.com/wsj/arch_local/461247
(Note how this is buried on a Friday instead of put in the Sunday Business Section).
If condo inventory is at two years and there’s already high apartment inventory, what will that do for rent? Hmmm….over supply, less demand..
Can’t afford the new apartments? At one place renters can get a rent reduction by repairing units. I hope they do good work…
http://www.madison.com/wsj/home/local/461205
Another local mall plans to become a mixed-use lifestyle center with offices, apartments or condominiums mixed with shopping.
http://www.madison.com/tct/business/460713
This is almost as good as another strip mall, less than 2 miles away, planning a condo development because they saw a need for low cost condo’s in Madison. Thankfully, that plan hasn’t gone anywhere. And the big anchor for this strip mall - the budget cinema.
DUH! But worth taking a look at the link, if only to get a gander at that grinning death’s head.
http://www.businessinsider.com/hank-paulson-in-constant-contact-with-goldman-during-crisis-2009-8
I wonder when this type if thing will end in violence?
Dunno, but it makes me nervous when well educated folks misspell simple words (”of”/”if”). I know from personal experience that I cannot spell when I am highly incensed.
I can’t spell when it’s Sunday morning and I haven’t had enuf cawfee.
“Dunno, but it makes me nervous when well educated folks misspell simple words ”
I just type away. Between working at home, writing for my program, et. al. I really don’t edit. Don’t let it bother you if you get the point of my post.
Or, let it bother you.
It doesn’t bother me — I was just making a conjecture (but it’s never a good idea to conduct inference from a sample with only one data point
).
it’s never a good idea to conduct inference from a sample with only one data point
That never stopped a politician!
Never. The GS crowd doesn’t “do” town hall meetings.
I mean, really, the Biggest. Rip-Off. Ever. and the best people can do is agitate over a non-existent health care bill. Although I will say it was worth the price of admission to see the condescending Kathy Castor white with shock when confronted by an angry crowd. She thought she was gonna preach to everyone and they’d sit with folded hands hanging on her every word.
“…agitate over a non-existent health care bill.”
It’s been a pretty effective political diversion, hasn’t it? (Though I must confess that I myself have successfully ignored the nonstory…)
Screeching and carrying on at town hall meetings may help the rubes blow off steam, but it won’t change diddly. To make a difference, you have to be willing to contribute your time, money, and energy to support worthy, principled candidates not afraid to buck the corrupt, bought-and-paid-for GOP and DNC (”Republicrat”) party leadership that is leading us to disaster. Signing petitions and acting out at stage-managed town halls is a complete waste of time, and not a way to be taken seriously.
That is a good question, but, I bet it will, someday.
There it is again: The implication that the world would possibly end had not the FED and the banks all colluded to double-down ont their ponzi-scheme. Who else is tired of hearing this same financial fear-mongering nonsense?
I frankly cannot convince myself one way or the other between the official position of the Fed, Treasury, etc. that had they not acted how and when they did, the situation would have been oh so much worse, versus the alternative hypothesis that the crisis provided a convenient opportunity for JP Morgan, Goldman Sachs, etc. to consolidate their financial positions (and perhaps both are true!).
How can one ever say what would have happened if things had gone differently, as you cannot turn back the clock and run the other version of the experiment? (I suppose this insight this gives policymakers good cover for whatever course of action they decide to pursue…)
I often wonder what’s worse - that they did what they did or that they did what they did without any meaningful debate?
The response letters from my congresscritters all reeked of…”you can’t handle the truth!”
IMHO that’s about as condescending as it gets. We can’t handle the truth when it comes to decisions like Iraq and TARP, but we can handle it in decisions like paying too much for a house or signing up for a life of debt servicing?
The laws were already in place as to how the meltdown should of came down . The government could of decided how to
give restitution where needed and deserved after many Companies went
belly up . I think that Wall Street was trying to avoid the lawsuits and criminal convictions that would of come about
had the meltdown come about based on the laws at the time .
The Bail-outs were nothing but a transfer of the bottomless
pit of losses from the Pirates to the taxpayers ,and nothing more than Obstruction of Justice . Why do we even have to argue the point about needing transparency ?The Powers don’t want you to know who is getting the gravy . The powers say one thing ,than they do another .
Paulson’s BS about Bail-outs first and than conduct investigations and regulations later, because it’s a fire emergency ,was a ploy . The Feds could of kept on giving short term loans to these piece of shit Companies until the truth and a proper course of action was determined . Now all you have is a bunch of waste and the Pirates still rewarding themselves with big paychecks and no transparency . The Powers are still arguing over who gets to regulate these thieves .
Go ahead ,thank these guys for saving you just because they have convinced you that they saved you . They saved themselves ,or they saved the Chosen Ones ,and the
bought off Politicians went along with it .
“…they did what they did without any meaningful debate?”
This is one of the secrets of disaster capitalism: When a crisis is in progress, the usual rules don’t apply, so whoever is in charge has carte blanche to do as he pleases.
BTW, the fact that the Wall Street banking pigs are rolling in the bonus trough at the moment certainly adds credence to the hypothesis that last fall’s crisis may have been due, at least in part, to skillful financial engineering, neh?
“…and the bought off Politicians went along with it .”
Next task: Buying off the economic historians with research grants funded by Megabank, Inc and the Federal Reserve.
I do tend to agree that “the system” would have collapsed, since it was “their” system. The system should have been let collapse and immediately replaced with something stable and sensible. The board should have been swept and the game re-set. But the people capable of doing that were suppressed. And then there’s China…
But I think this illustrates the need for a whole new system, or perhaps an old, workable one.
For some reason, I’ve been meditating on Turbo Tax Timmay’s potty mouth meltdown. It just seems a little strange to me that a man with that much power would get so hysterical with fellow regulators. There’s a lot more here than meets the eye. I think the guy is in deep trouble with TPTB in China, I really do. Remember, China has no compunctions about executing its own financial officials when wrong has been done. Wonder what’s in store for Timmay if he can’t please his Chinese constituents?
Let’s not forget Timmay is a Kissinger protege.
..should have been let collapse and immediately replaced with something stable and sensible…
someone’s gonna wave a magic wand and a “better” system will replace what was there? Will people learn the lessons you think they should learn?
i doubt anything would change for the better.. and if history is any guide, they won’t.
Palmy, I would hate to hear about Timmay having to endure bamboo-shoots (green ones) shoved underneath his fingernails as the Chinese try to persuade him to comply with their plan. That would be just terrible.
pametto,
“Turbo Tax Timmay’s potty mouth meltdown.” Please enlighten me. I don’t get out much.
Roidy
As posted a few days ago, I think TTT’s meltdown is evidence that he’s Peter Principled in his current position.
Wall Street Journal reported a leak that Secretary Geitner was used less than gentile language in a Friday afternoon meeting with the heads of the FDIC and SEC (correct me if I’m wrong on the two officials, guys). They objected to his preference of the Fed as the regulator of systemic risk. They think that since the systemic risk collects in the banks and the large public companies, that their organizations - organizations that already regulate banks and large public companies - should have a role in this new regulatory function.
Don’t forget that he’s in a position to be tarred & scapegoated.
Paulson, Greenspan, Bernanke, and Geithner’s reputations and respective places in history are tied to policies that, while they’ve embraced them publicly, may or may not be the courses of action they would’ve pursued without the usual political considerations and strong-arming from Washington and Wall Street. Regardless, they’re the de factoarchitects of those policies now.
What I’m saying, I guess, is that things haven’t been going well, things aren’t looking too promising, and there’s a fair amount of of good ol’ ego involved. Just look at Greenspan’s furious revisionism in the past couple of years — these fellows all want to be major power players, but don’t want their names tarnished in the history books as the nimrods who f%cked it all up and brought the era of American Prosperity to an end.
“i doubt anything would change for the better.. and if history is any guide, they won’t.”
We can always hope, though, like the founding fathers of the USA did circa 1776… Absolute pessimism tends to eliminate opportunities for constructive change.
“Turbo Tax Timmay’s potty mouth meltdown.”
‘Twas a sign of weakness which MSM-propagandists are trying their best to spin as a sign of strength. I hope Sheila Bair holds her ground against the Fed’s attempted financial coup d’etat. Hopefully Constitutional checks and balances will prevail over the unelected Fed officials’ political campaign for more power.
Bear… you’re not gonna compare being upset about being ruled by a King from across the sea to spending ourselves into oblivion.. right?
Think great depression. Stalin’s rise in the late 30’s.. Hitler’s rise to power.. and even the USA where we took a leap towards socialism..
The depths of poverty, fear, hunger and unrest is not where smart decisions are made.. It’s not where patriots are born.
———
As for the sec of the Treasury, i remember us saying only an idiot would take that job..
“Think great depression. Stalin’s rise in the late 30’s…”
Soviet Union’s demise (thanks to a failed economy) in 1989…
I think it went from 1922 to 1991…
The Soviet Union’s economy died because socialism is a ponzi scheme and, like all ponzi schemes, carries the seeds of it’s own destruction.
That’s not to say a ruthless, despotic government can’t force the issue for quite a while.. the USSR might hold the record. China’s commies came to power near the same time, 1921, but at least parts of China had gone capitalist for a while…
Fear mongering? Things looked pretty damn bad for a while. They still do, imo.
I think most people who claim to believe our financial troubles don’t / didn’t present a real threat of a systemic socio-economic collapse would actually welcome one.
Why would they welcome one? ..i dunno. Well i do have ideas why.. but it wouldn’t be productive to express them.
goldbuggery?
joey ,they just changed who the bag-holders of the loss would be ……..and that is all . The black hole of loss was shifted to
the taxpayers and wrong parties instead of a certain breed of risk taker . FDIC would of covered the loss for many depositors and the gov. could of shored up FDIC if it ran out of money . The objective was to keep Corrupt Companies alive . We had a great chance to get rid of the Corrupted in our financial systems ,had we just let the current laws at the time determine the bag-holders . Why did the unregulated finance world need to be bailed out ? The regulated Banking system might of been needed .but who cares
if the gamblers in the unregulated investments or the side Casino bets went belly-up . Many of these accounts were not insured and the risk-takers were getting higher yields for their risk .
The point is that many Wall Street firms would of been sued for their bad faith in business and the Bail-outs were simply
a way to avoid that Justice . The liar loan borrowers would of lost the house and had a tax bill to pay ,or they would of sued for being a victim of the Wall Street Ponzi-scheme .
So ,you still have a Corrupt financial system and plenty of waste by the bail-outs ,and a meaningful Obstruction of Justice of the necessary purge that was needed in our Financial systems . Oh,they saved us …….are you kidding ?
..FDIC would of covered the loss for many depositors and the gov. could of shored up FDIC if it ran out of money..
Really? Think the FDIC could save us from a widespread run on the banks?
Think about it.. everyone with money in a bank thinks it’s best to withdraw it.
First off, last time i looked there was something near $40 Trillion in deposits. Banks keep about 5% in cash reserves? So, $38,000,000,000,000 evaporates.. gonna just print more money? Gonna print $38T? Is that what you wanna see happen?
Meanwhile virtually (if not literally) every existing bank falls, along with the dominoes they smash into, which includes virtually all credit / investment dependent enterprises, meaning just about every business larger than a kid’s lemonade stand..
Reverse the unemployment figures and you’d probably come close to reality… meaning 11% gainfully employed and 89% going hungry.
hmm.. i had a feeling i was mistaken a looked it up.. total US bank deposits seem to be nearer to only $7T, not 40..
but that 40T number sure is familiar to me.. it might include investments other than cash and cash-equivalent deposits.
In any case it won’t be pretty if people think banks aren’t safe. I asked my banker friend how much cash people should keep on hand. She said a few thousand.. what’s the point of keeping more? If there’s massive bank failure, the dollar fails, so cash won’t be useful.
“…would actually welcome one.”
Some people who regularly post here suffer from a severe case of killthemessengeritis. But I do note that those Wall Street firms who managed to survive the crisis are having a banner year, and their firms have the prospect of enjoying much larger market shares as the economy recovers from the meltdown.
a banner year on wall street..
i’ll tell ya something odd.. The DOW was way over 14K and then began to take it’s dive, I dumped a couple things like small amounts of Home Depot and Ford, but otherwise stayed put.
My portfolio lost a bit over 20% when the DOW was at it’s bottom of 7K.
Now.. You’d think DOW would need to rise back to 14K before i regained the 20%.. at least i thought so.
But it’s already happened.. i’m even at a DJIA of just 9,300.
I’m not alone.. everybody and his momma has something, somehow invested in stocks. Whatever wall street is up is profitable for lots of people.
I think it’s more like, the longer those firms stay around, the longer it will to have a real recovery. It was new companies, not the tired old behemoths, that finally led the country out of GD I.
Make that “… the longer it will take …”
And these numerous and timely calls are just on Paulson’s government phone line. The article points out we don’t know his private or cell phone calls.
“grinning death’s head”, that is cool Palmy
Plus the article makes me want to throw up too, so, I guess that is cool as well.
He Hopes You Have Enjoyed the Show - Paul McCartney, Still a Performer Without Peer
By David Malitz
Washington Post
Paul McCartney is the only person in the entire world capable of what happened on Saturday night: He sang his classics for nearly three hours as he presided over an enormously and universally pleasing lovefest at FedEx Field. A small handful may be able to claim an equally lauded songbook, but nobody’s is as widely cherished, and Macca wasn’t stingy in the slightest when it came giving the fans all they wanted — a whopping 21 Beatles songs were included in the set. He’s the definition of a legend, but that initial feeling of reverence quickly faded once he started chatting, affirming his status as the friendliest rock god who walks the Earth. It was simply one of those shows that left you feeling tingly on the way home.
Anyone wondering why the 67-year-old musical deity continues to take his show on the road was greeted with multiple answers, each more convincing than the last. The first is that he’s still damn good at it, and with only the most minimal reliance on any pomp and circumstance. This was not a spectacle; it was a rock-and-roll show. After noting that the Beatles’ first U.S. gig 4 1/2 decades ago was in Washington, McCartney joked, “We’ve got bigger amps now!” But save some well-placed pyrotechnics during an appropriately explosive version of “Live and Let Die,” there was nothing over-the-top about the performance. Fronting a modest five-piece band, McCartney smartly let his songs serve as the centerpiece, and they were played with passion and precision. Time has taken its toll on the voices of some of his contemporaries, but Macca’s remains in peak form; he belted out the chorus of “Got to Get You Into My Life” with gusto to spare and hit every note during “Blackbird.” He deftly toggled between acoustic and electric guitar, piano, even ukulele and mandolin, along with his trademark bass, all while maintaining an expert flow between Beatles, Wings and his solo material.
The second is that he clearly enjoys it, in his own silly way. He hammed it up, endlessly pointing to individual audience members while making goofy faces and hopping from center stage to his perch at the piano. Twice he mentioned how in the old days he couldn’t hear his own songs because of all the screaming girls — cue the shrieks throughout the stadium and McCartney’s “Oh, did I do that?” grin. There was an extra perk in his voice when he dedicated “Michelle” to the Obamas.
Perhaps most importantly, one can sense that McCartney feels a responsibility to give back to his adoring fans. The Beatles phenomenon is one that defies generational categorization and is unlikely to ever be matched. His tributes to John Lennon (a solemn “Here Today” plus “Give Peace a Chance”) and George Harrison (”Something,” played on a ukulele that was a gift from Harrison) were touching, and he’s the only one who can pull that off without it feeling exploitative. McCartney isn’t the only musical act capable of filling a stadium, but the pure joy he brings his fans, of all ages, is unmatched. When he hangs it up, there will be an unfillable void.
He ended his set with “Hey Jude,” which endures as the most irresistible singalong ever. Inside the stadium, people came together: those who grew up with his songs and those who discovered them decades later. There was hugging, swaying, the lighting of lighters. Practically everyone giddily gave in to the “Na, na na, na na na na” chorus. The single syllable was appropriate — actual words weren’t necessary to convey the feeling. After the song the beknighted Liverpudlian took a bow, flashed his goofy grin and spryly made his way offstage, concluding the magical — no other word for it — evening.
Oh. Then McCartney came back out and ripped through eight more Beatles classics — “Day Tripper!” “I Saw Her Standing There!” “Get Back!” “The End!” — that worked the crowd into an extended state of delirium as the midnight hour approached.
Only Sir Paul.
Hi, ATE, thanks for that. Sir Paul is truly a legend, a gentleman and a romantic. A shame that pill Heather got her meathooks into him. He deserved better.
Thanks Palmy, Paul is just soft-hearted, and probably married her because she had a physical handicap and overcame it, in my opinion. What do you think?
I completely agree. His kids had her number, though. One case where father didn’t know best.
“but the pure joy he brings his fans, of all ages, is unmatched.”
Ain’t it da trute?
And then it took them three hours to get home. Fedex field is supposed to be a nighmare. “Supposed to be” because I have never actually braved it myself.
NYB, your post got eaten by accident. Sorry.
Add some fava beans and chianti and you have a meal.
This is AMAZING:
Lehigh Acres, Florida’s lesson in unregulated growth
http://www.tampabay.com/news/growth/article1025808.ece
Photo Gallery
http://www.tampabay.com/specials/2009/photo_galleries/lehigh_acres/
Muggy: That IS amazing. I read the entire article and looked at the phot gallery. I didn’t know this, and I lived in Tampa. Mindblowing stuff. Amazing!
That article is a must-read. And Florida’s (sadly predictable) response to their disastrous growth and consequent collapse? Even less regulations on development! Let’s get rid of the last of those pesky wetlands- that’ll bring back the boom.
Truly amazing, Muggy.
But we saw above that he’s moved on:
My initial outrage was provoked when I misread “building products” as “building projects,” but I really don’t like the idea of this guy selling anything anywhere. Doesn’t Africa have enough problems without this guy selling them stuff?
This guy is a scum. From the article:
“We gave so much thought to selling the land that the normal reservations for commercial properties, schools, all the ancillary things you need in a community, weren’t made,” said Gould, now 85. “We even had canals that ran uphill. I don’t know any mistake you could make that we didn’t make.”
“Gould was one of the original developers. Sixty years later, he thinks the government has a responsibility to protect the public from the greed of developers.”
What, is he having an attack of conscience in his older age, unable to run and hide from the damage he has wrought? He is the poster boy for rapacious behavior run amok; a miscreant of the highest order. Rot in hell, Gould.
“Rot in hell, Gould.”
He’s lived in Florida for a quite a while. Time served. :grin”
This is a constant cycle in Florida.
Also happened in the 1920s.
Fun fact: Houston was founded by the Allen brothers who did exactly the same thing by running newspaper ads and luring unsuspecting settlers into the region.
You can bet Detroit is being sold the same way these days, only to foreigners instead of locals.
IRS warns fraudsters about cheating on the $8K first-time buyer credit. My question: What happens when the program “disappears” Dec. 1? (My guess: It won’t disappear, as there is no such thing as a “temporary” government program.)
Kenneth Harney
Nation’s Housing
IRS cracks down on tax credit cheaters
2:00 a.m. August 9, 2009
WASHINGTON — The IRS has an urgent message for would-be home purchasers: Make the most of the $8,000 first-time buyer tax credit before it disappears Dec. 1 — if you qualify.
But if you don’t truly qualify, don’t try to play games with the credit. The IRS already has 24 criminal investigations of suspected fraud under way around the country. It has executed seven search warrants and last month a tax preparer in Florida entered a guilty plea on federal charges of fraud in connection with the first-time buyer credit. He’s awaiting sentencing and faces up to three years in prison and a $250,000 fine.
Congress’ two versions of the first-time buyer credit — a repayable $7,500 credit in 2008, and this year’s more generous $8,000 nonrepayable credit — have stimulated home sales nationwide. But they’ve also become irresistible temptations for dishonest taxpayers to cash in and claim bogus refunds.
Claiming the credit looks so easy: You just fill out IRS form 5405, list the address of the house you bought, mail it in and wait for your money from the IRS in a month or two. Who’s going to check on whether you really qualify under the definition of first-time buyer — someone who hasn’t owned a principal residence during the previous three years — and that you’re eligible on income and other factors?
And with thousands of people buying houses and claiming tax credits, who’s going to be able to check on all those filings? The answer from the IRS: We are. In a statement at the end of July, the agency said it uses “sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time home-buyer credit.”
…
Kenneth R. Harney is a nationally syndicated real estate columnist with the Washington Post Writers Group. His e-mail address is kenharney@earthlink.net.
Big boyz get a mulligan, little guys get scrutinized.
+1
Big boyz get taxpayer-financed bonus payments large enough to let them easily afford $1m+ homes. Little guys get pink slips and NODs.
Does this mean the IRS won’t bother to check your income tax return to see that you qualify. Sort of like putting two and two together. YEP, can’t wait for Fed’s to “reform” health care.
That’s probably what the “sophisticated computer screening tool” is doing: comparing the SS#(s) on the 5405 to previously filed returns in order to see if you’ve deducted mortgage interest or property taxes in the past three years.
I’m with you on the inevitability of this $8k credit being renewed.. the only question is whether the amount will actually be increased.
Should foreclosure sales be reflected in appraisals? Of course.
Should they be treated as equivalent to nonforeclosure sales? Of course not.
I really don’t understand why the above facts are so difficult for real estate people to reconcile.
Business
Josh Brodesky: Foreclosures factored into appraisals hit sellers hard
By Josh Brodesky
Arizona Daily Star
Tucson, Arizona | Published: 08.09.2009
If you are trying to sell your home in this market, your biggest challenge probably isn’t finding a willing buyer, but the foreclosure down the street.
Not only do you have to compete in price with it, but that foreclosure is going to factor into your appraisal as a comp, possibly scuttling a deal.
Is it fair? Probably not. There can be a world of difference between a bank-owned home that’s been through hell and back and a gently used home that’s been lovingly maintained by its owners.
But we’re in a declining market and lenders are hedging their bets against falling values.
“The way the banks feel is, they want the lowest value possible,” said Edward Madson, of Madson, Brown & Assoc. Real Estate Appraisers. “They are worried the statistics for Arizona (show) that it is a declining market.”
…
..Should they be treated as equivalent to nonforeclosure sales? Of course not.
What does the financial history of a property have to do with it’s value?
Two identical homes for sale, stand side by side.. one is in foreclosure. One has less value? One is worth more than the other? Why?
The transaction has to be a arms length transaction ,so the history of the property has bearing on the viability of it being a true market comp. For example ,if a couple people in the same family keep selling the property back and forth to each other ,the sales price most likely isn’t a arms length transaction . A foreclosure is a distressed sale and
often times is in need of repairs ,but if the whole neighborhood
has nothing but foreclosures ,than those foreclosures will bring down
the entire value of the neighborhood ,even the homes that don’t need repair .Its a matter of the neighborhood becoming unstable and this could happen if a Plant closed down and the neighborhood doesn’t have a good demand for that location anymore or there are to many homes for sale . So ,foreclosures can be a clear sign of the future value of a neighborhood .
If you have a property in which the financial history shows that there was to much of a turnover of the property ,it could be a red flag for a loan underwriter . During the boom ,loan underwriters should of seen that houses were being flipped to much and to many sales were occurring on the same property in a short amount of time .
They just didn’t underwrite loans during the Boom and it was just a game of come in at whatever sales price came in . Crazy ..really crazy and no wonder fraud became commonplace .
Housing Wizard,
I was doing some research on a street today. Went and looked at tax records for the entire length. There was a notably large proportion of “arms length” sales for $1. The names were not the same.
Any idea what’s going on there?
The street is very stable. Most homes were last purchased in the early 90s.
“What does the financial history of a property have to do with it’s value?”
I totally agree with you on that. The suggestion which often is brought up by confused MSM financial journalists is that foreclosures should not count as comps because they are often sold in dilapidated condition. But I am sure many nonforeclosure-related used home sales also involve homes that are poorly maintained (off the top of my head, I can think of some family members who learned that lesson first hand!). Of course the condition of a used home should affect the sale value, but whether it is in foreclosure is a red herring.
“What does the financial history of a property have to do with it’s value?”
There may be some noteworthy exceptions, though:
Making a Killing in Real Estate
A thought just occurred to me . This isn’t a market that you can
apply standard appraisal rules to conclude value . We have homeowners that are walking even if they can afford to pay the mortgage and haven’t lost their job . We have entire tracks and condo projects that were built to sell to investors, who would have no viable buyers to sell to ,or at least no end-user demand for
some of those projects . Add to that all the foreclosures due to job loss and just plain fraud and how can you determine market value ? A normal market would not have these current risk factors for additional decline or lack of demand .
The future market value is all based on homeowners walking or not in the near future . It was a bogus fraud market and it’ crashed and even buyers currently buying doesn’t determine the market value because of the potential risk factors in the market .
So, I don’t even know why underwriters think they are writing loans against stable values and why any bank would want to
write more bad loans in non-recourse States ,(unless someone put a lot of money down ). Oh ,I forgot ,the taxpayers are backing the loans made .
.
Housing Wizard..
agree it’s not a normal market where common standards apply.
And in the general sense, it seems to me the deficiency is with appraisal methods, not with the foreclosed properties.
They assume the sale wasn’t arm’s length… assume the sale was distressed. At the least, a voluntary walkaway should be in a separate category, imo.
A really good appraisal could discover the pertinent details, but i imagine it would be too time consuming and expensive to be practical..
Problem is with the nature of residential real estate, not apprasial methods, though methods seem to be quite lax. Most houses are in fact unique. Apprasials should be are approximations of what an average buyer would be will int to pay. Some will always pay more, some less, because individual demand is also unique. This is why houses are not liquid investments and why transaction costs are high.
But foreclosures certainly should be included in the comps, with conditions appropriately footnoted as, I presume, would be the case in any competent apprasial.
Nothing stops people from bringing extra money to the table…. except if they don’t have the money to begin with…
I’m sure banks would be delighted to accept slightly higer appraisals evne in a declining market if the borrowers would be willing to put down 40% down payments.
OK?
Perfect! Perhaps our top government officials could start up a “Cash for Foreclosures” program to provide 40 percent down payments for worthy home buyers who haven’t managed to save up that much money on their own?
P.S. Note that the government guarantees on FHA/FNM/FRE loans may portend a big future injection of taxpayer monies into the housing market, when many of the current cohort of fence-sitters lured in to buying unaffordably priced homes eventually either realize they were snookered into overpaying, or for reasons beyond their control, find themselves unable to keep up their mortgage payments. I am guessing the number of adversely selected buyers who are currently snapping up homes with govt-guaranteed mortgages will later prove to have a “higher-than-expected” default rate, but it’s all good, as lenders and their investors will be made whole with taxpayer-funded claims payments on the government-guaranteed debt.
I checked the 31% affordability number against my own salary. 31% of my yearly gross income comes to 66% of my monthly take home pay. Now, I calculated my take home without considering the two months a year I get an “extra” paycheck because, honestly, most folks are too close to living from paycheck to paycheck to consider money they don’t get every month. Also, I figure most folks use that money to pay for Christmas or summer camp or taxes or some other infrequent expense. I use it to fund my Roth IRA.
I don’t see how anyone can sustain a life on that sort of budget. The amount is nearly double my rent and at least $1000 more than you could rent a house for in my general area.
“Fair” = “Market (price) discovery.” No more, no less, IMO.
I accidently let personal information slip out in a previous, so I thought I would clarify, I was married two times, to two very beautiful ladies, both as good as sunshine at midnight.
I lost them both due to drugs, money, and immaturity. I learned my lessons, and they know it.
End of subject, but necessary correction for the quality people on this blog.
ATE-UP - your post reminds me of an age-old adage, “Quit while you’re behind.” Most times, not reminding folks of your mess-up is way better than a fess-up. That said, my recollection is from pre-Internet times - nowadays, anything you post might haunt you forever. I’ve tried to teach my kids that, especially re their social-site posts. It’s a different world, for sure.
Your point is well taken Chip.
Chip:
I am a moron i am a moron i am a moron
maybe that will haunt me and nobody will ask me for a loan ever again……
I admire Ate’s honesty and he’s shown strength in beating his demons. Ate, I’m not a woman, but I have lived long enough to know that women are attracted to strength, honesty and confidence. The good part is, you’re 2/3’s of the way there.
You are a good person, and I hope you get this post.
Thank you so much for your comment, and you too dj. 
Wondering why inventories are declining during the red-hot summer sales season? Look no further than your local foreclosure moratorium.
HOUSING MARKET: Prime loan borrowers may be poised to face home foreclosures
Local foreclosure crisis expected to worsen
By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL
Las Vegas real estate agent Frank Nason has read numerous reports about Nevada leading the nation in foreclosures and the “phantom inventory” of foreclosures coming down the pike.
He’s yet to see it. Where are all of these foreclosed properties in Las Vegas?
In analyzing the first six months of Clark County Assessor records, Nason found that banks are shedding single-family properties at a much faster pace than they’ve been acquiring them through foreclosure.
Through June, financial institutions acquired 6,472 real estate-owned properties and sold 11,254, the broker-owner of Residential Resources reported. He defines an REO, or bank-owned property, as any transaction in which the lender acquired the property through a trustee sale.
Las Vegas-based SalesTraq showed REO inventory declining from nearly 16,000 in January to 13,200 in June.
The banks’ voluntary foreclosure moratorium, combined with increased investor activity in Las Vegas, may explain the drop in foreclosure inventory, Nason said.
That’s about to change. After the moratorium was lifted in March, bank-owned acquisitions jumped 55 percent in May and nearly 40 percent in June.
“If this trend continues and the amount of properties disposed of stays relatively constant, then we can expect to see a new glut of REOs on the market in the third quarter and, most likely, continued downward pressure on pricing,” Nason said in a blog posted at residentialresources dot com.
He’s heard that Fannie Mae and Freddie Mac foreclosures could increase by 400 percent to 500 percent by the end of the year.
“I don’t see the huge wave, but we hear about the inventory being held back,” said Mercedes Tan, owner of Preservation West, a local business that cleans and maintains foreclosed homes. “It’s a property tax issue. The banks don’t want to take on property tax.”
Isn’t it illegal for banks to abandon their end of a mortgage contract to avoid paying property tax? It seems like there is a simple solution here: If banks don’t take possession of abandoned property within some time window, the local government can claim it and sell it at auction.
But that raises a further issue: If local governments sell lots of abandoned property at auction, perhaps that will suppress property values further, and erode the tax base.
The silver lining: Affordable housing will bring in a new, young, vibrant work force. The fruits of future labor will restore the eroding revenue base, if only home prices are allowed to return to affordable levels for young families to take root.
Isn’t it illegal for banks to abandon their end of a mortgage contract to avoid paying property tax? It seems like there is a simple solution here: If banks don’t take possession of abandoned property within some time window, the local government can claim it and sell it at auction.
If the borrower defaults, the bank is under no duty to foreclose. The bank may simply waive the mortgage and let the borrower keep the house free and clear of the mortgage.
Why bring in a 3rd party to the case - here you mention local government.
A much simpler and more effective solution would be to shorten the statute of limitations for exercising a foreclosure to 6 months.
Six months after the NOD, if the bank doesn’t foreclose then they would be legally barred from ever foreclosing. The borrower would then be off the hook and own the house free and clear of the mortgage.
Isn’t this the simpler and more elegant solution?
I like it, especially if no taxpayer subsidies are involved, as this would hasten the purging of bad banks which threw away money on poorly underwritten loans out of the system.
“A much simpler and more effective solution would be to shorten the statute of limitations for exercising a foreclosure to 6 months. Six months after the NOD, if the bank doesn’t foreclose then they would be legally barred from ever foreclosing. The borrower would then be off the hook and own the house free and clear of the mortgage.”
In IL, the time between NOD to REO can be up to two years (its a judicial foreclosure state). I’d love to see that time shortened. Unfortunately, the main reason it takes that long is because FBs drag it out in court. The only way to discharge a deficiency judgement is bankruptcy, so if your credit is already trashed and about to get worse, why not live there free for two years?
In fact, if I were a FB who had missed payments for 18 months and the bank didn’t foreclose on me, I would hire a lawyer and file a “quiet title” action on the property. I would claim under the equitable doctrine of estopple by laches that the bank would be foreclosed from ever foreclosing on the house, and hence my title should be affirmed without a mortgage.
Polly? 8-up? What do you think? Would a laches defense work here?
First they have to find out who really has the mortgage.
Many folks are challenging and winning because nobody knows who really holds the mortgage.
Even better. The FB wins his quiet title action by default.
Exactly.
“The FB wins his quiet title action by default.”
I have often wondered about the meaning of the cliche, ‘Possession is ninety percent of the law.’ Now I am beginning to understand.
PB - late to reply, but nice post.
Treasury about to hit borrowing limit!
WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner formally requested that Congress raise the $12.1 trillion statutory debt limit on Friday, saying that it could be breached as early as mid-October. About a year ago (Jul. 30, ‘08) Congress raised the debt limit from $9.815 trillion to $10.6 trillion. Barely two months later (Oct. 3, ‘08) it raised the limit to $11.3 trillion. Early this year Congress very quietly approved an increase to $12.1 trillion. The Treasury Department is fast approaching that ceiling and wants to raise it again. Soon. Congress has never turned down the department’s request for higher debt. We’re guessing, conservatively, that the new statutory debt limit will be $13.2 trillion.
But if we had our wits about us we would put fierce pressure on Congress to DENY THE INCREASE. Yes, it would hurt like hell to force the federal government to quit borrowing from the future to meet its out-of-control spending, but it will hurt even more if Congress is allowed to completely destroy the dollar.
The government is too corrupt and out of control for any reform to take place short of a serious national disaster.
“After the last Great Depression, Keynesian economists emerged victorious in proposing that a nation must spend its way out of crisis. This time around, they will be proven wrong,” writes Andrew Gavin Marshall “The world is a very different place now. Loose credit, easy spending and massive debt is what has led the world to the current economic crisis; spending is not the way out.”
Mr. Marshall is apparently not reading the cheery news from Wall Street, which points out that stock prices have gone up in recent weeks and that is seen as the long-heralded beginning of the end of this serious economic recession.
We wish it were true, but there are far too many more bubbles yet to burst before we can declare victory over the economic downturn. Obamanomics guarantees a prolonged recession. The nation can’t resolve a problem of debt overload by merely taking on more debt.
Marshall gets the gloom-and-doom prize of the day for concluding, “Loose credit, easy spending and massive debt is what has led the world to the current economic crisis, spending is not the way out. The world has been functioning on a debt based global economy. This debt based monetary system, controlled and operated by the global central banking system, of which the apex is the Bank for International Settlements, is unsustainable. This is the real bubble, the debt bubble. When it bursts, and it will burst, the world will enter into the Greatest Depression in world history.”
“Mr. Marshall is apparently not reading the cheery news from Wall Street, which points out that stock prices have gone up in recent weeks and that is seen as the long-heralded beginning of the end of this serious economic recession.”
So far, so good on the gubmint-sponsored Terry Schiavo economy!
It reacts to loved ones!
LOL! that is funny.
“Loose credit, easy spending and massive debt is what has led the world to the current economic crisis, spending is not the way out.”
I guess he has never heard of the hair-of-the-dog hangover cure?
Mansions Go Under the Gavel.
NYT 8-8-09
LITTLE TORCH KEY, Fla. — Jack Warner leaned against his home bar and checked his watch before resuming his blank stare at the white tent outside his multimillion-dollar dream house, with its swimming pool and views of the Florida gulf, soon to be sold at auction.
“My whole life happens in two hours,” he said. “I feel like I am playing the part of Old Yeller,“ wondering if he will survive financially or perhaps just be put out of his misery, like the fictional dog. An auction, and having people traipse through a house in previews before bidding, smacks of desperation. But increasingly, people with multimillion-dollar homes who need to raise money are discovering they have few alternatives, as the luxury real estate market is especially moribund.
“We are seeing more people with homes that were on the market for $4 million to $7 million that are not selling and they are calling us,” said Jim Gall, president of Auction Company of America.
Mr. Warner, 61, bought his house and an adjacent property that once had a trailer park on Little Torch Key, north of Key West, in 1993. It was appraised at nearly $14 million just two years ago. But after losing a large amount of money, he liquidated his construction business in Elkhart, Ind. Last year, another company he owned, Lucky’s Landing, which essentially owned his Florida real estate, filed for bankruptcy protection and its assets came under court oversight.
When no buyer emerged at the listing price of $5.9 million, Mr. Warner asked the United States Bankruptcy Court in Miami to approve the property’s sale at auction. He had a lot riding on the request. To avoid personal bankruptcy, he said, the sale had to generate more than $3 million, roughly the remaining amount of the mortgages.
The gavel ultimately came down at $2.5 million. Mr. Warner’s hopes withered as he uttered softly: “O.K., I’m broke.”
Dang, another Schadenfreude Meter with the needle knocked completely off its pivot and a wisp of smoke coming out the back.
That’s why you have to go with the new digital models!
Why didn’t I think of that? Thanks eco!
Very Funny, Bill. I love it.
My schadenfruede meter is like Spinal Tap’s amp. Had to peg it to 11 with all these overreaching FBs and their tales of woe.
‘Mr. Warner, 61, bought his house and an adjacent property that once had a trailer park on Little Torch Key, north of Key West, in 1993. It was appraised at nearly $14 million just two years ago.
…
When no buyer emerged at the listing price of $5.9 million, Mr. Warner asked the United States Bankruptcy Court in Miami to approve the property’s sale at auction.
…
To avoid personal bankruptcy, he said, the sale had to generate more than $3 million, roughly the remaining amount of the mortgages.
The gavel ultimately came down at $2.5 million. Mr. Warner’s hopes withered as he uttered softly: “O.K., I’m broke.”’
Sale by Dutch auction:
‘Do I hear $14 million?’ (Nobody in the audience budges.)
‘OK, do I hear $5.9 million?’ (Silence)
‘$3 million, anybody?’ (Silence)
‘$2.9 million’ (Silence)
‘$2.8 million’ (Silence)
‘$2.7 million’ (Silence)
‘$2.6 million’ (Cough)
‘How about $2.5 million?’ (A lone hand is cautiously raised)
‘Sold, to the highest bidder, at $2.5 million.’
Silly Rabbit. Real Estate Investing is for kids.
Another Trump wannabe became a Trump in the bankruptcy mode.
Multi-generational wealthy families such as the Kennedys, and the Bushes do not put all their money into real estate. They diversified a long time ago into municipal bonds, international stocks, and treasuries and they rebalance their portfolios regularly.
They know “market timing” has been gullibly accepted by the losers.
“and the Bushes do not put all their money into real estate. They diversified a long time ago into Selling arms, municipal bonds, international stocks, Silverado Savings and Loan, and treasuries and they rebalance their portfolios regularly.”
In Placer County, California they charge parents either $9 or $11 per day (can’t remember which) if they have a child that is in a juvenile detention facility. Everyone pays regardless of economic status. If you are poor, they just put you on a payment plan. Something seems wrong here, but I don’t have enough information on subject to comment.
Wouldn’t lack of economic resources be one of the reasons your kid is in jail in the first place? If criminals are paying for their own incarceration, then shouldn’t taxes paid to house them be reduced? What do you guys think?
Just arrived back home on Maui after six weeks on the mainland. It seems Maui will get run over by Tropical Storm Felecia in 48 hours or less. I had to cancel the rest of my vacation and buy a very expensive Airline seat home. This AM out comes the chain saw and I will knock all the trees down around this house. Then I get to tape up all the glass and pull all the plants and stuff off my decks.
Need to get to work. I hope in 48 hours I still have a roof overhead.
Crash, been through it, and my hope is you and your family are safe during this. God Bless.
P.S. Sounds like you know the protocal! Go at it!
I really hate hurricanes. Especially Andrew, Katrina, Camille, Charley, Frances, Jeanne, and Ivan to name a few. Wilma was no lady either.
Me Me Me too Bub! I hate em’. One hell of a drain. Palmy hates em too!
I hate them too. That’s why we left Florida in 2005. (Don’t ask me why we moved to Florida in the first place!)
Should consider a reinforced concrete structure on high ground there in Hawaii. Then no worries except busted windows.
Ole’Bub!
Dang, Ivan the grrrrrrrr explamation point to the inth,
Yeah.
Left Florida for many reasons, hisacanes (HAH) one of them there reasons.
Truth, I love the Panhandle - always will.
Our loved ones moved out; and we love our loved ones!
Best,
Leigh
Good luck! Hurricane Iniki narrowly missed wifey and me on our honeymoon (it hit the week after we returned to the mainland).
Spielberg famously exploited the opportunity to include hurricane footage in his movie Jurrasic Park.
Come on Prof B. A week!!! What’s that?
C&B,
Give us the low down on HI real estate disaster.
http://www.preparedness.com/
Hope you’re prepared. When disaster strikes, it’s too late.
No firearms on this site. Where’s the fun in that?
I have a question that I hope someone here can answer. I have a purchase contract on a house. When we had the inspection we found that there was a bad and old heat pump that was working but had been jury rigged to work. We have asked the seller to replace it with a SEER 16 unit. I doubt he will do that and I want him to counter. I want to replace the unit so that I can get the $1500 tax credit and also put in an even more efficient system. I am using an FHA loan to buy the house. What I am wondering is can I take $4,000 or so from the seller at closing to put the new heat pump in?
I suspect FHA will not allow any “credit” from the seller to you…Get a bid for the work and have the seller pay the contractor that amount through escrow…
Hey WAman - long time no type
OK. purchase contract had inspection clause? If so, you win.
The seller appears to be in charge, depending on how the contract is worded; assuming you have a clause for inspection at x$ or some other such wording - good chance you will NOT get a counter.
Seller permitted an inspection.
Somewhere in the purchase contract MAY be a back-out clause for seller and/or buyer.
Telling is you want him (them) to counter.
Poker face!
Best Always,
Leigh
“For the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.”
“For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.”
http://www.nytimes.com/2009/08/08/business/economy/08charts.html
So it would appear that the PTB were indeed just grabbing everything they can before it all fell apart… all the while aggravating the situation as well.
Good find SDGreg.
Oh, and anybody want to Obama for this?
Bueller? Bueller? Anybody?
“…blame…” Sheesh. :rolleyes:
Oh come on, we all know these employment numbers were manipulated by the same super-sekrit society that forged Barry’s certificate of live birth. Just to get Obama in office.
[btw, to get the sarcastic smiley, it's just ": roll :" , with no spaces]
HOW oxide?
: : where is the roll?
my jelly
let me give you a hand, sweetie
Mr. Filter needs to listen to Dire Straits, (Preferably, Brothers’ In Arms”, first DDD CD ever released, I think)… Because, Mr. Filter is in Dire Straits. He needs nuclear Ex-Lax.
Oly? How do spell newcleur?
A one-night stay? Ninety dollars. Need to see a doctor? Ten bucks. Want toilet paper? Pay for it yourself.
In the ever-widening search for extra income during desperate economic times, states across the nation are embracing a new idea: making inmates pay their debt to society not only in hard time, but also in cold, hard cash.
In New York, GOP Assemblyman James Tedisco introduced a bill that would charge wealthy criminals $90 a day for room and board at state prisons.
Dubbed the “Madoff Bill,” after billion-dollar Ponzi schemer Bernard Madoff, the legislation is designed to ease the $1 billion annual cost of incarcerating prisoners.
“This concept says if you can afford it, or even some of it, you’re going to help the beleaguered taxpayers who play by the rules,” Tedisco said.
Several other states and some cities have gone to great lengths to squeeze money from inmates.
In Arizona’s Maricopa County, which includes Phoenix, Sheriff Joe Arpaio calls himself America’s toughest sheriff and makes prisoners sleep outdoors in 100-degree-plus heat.
Earlier this year, he announced that inmates would be charged $1.25 per day for meals. His decision followed months of food strikes staged by convicts who complained of being fed green bologna and moldy bread.
In Iowa’s Des Moines County, where officials faced a $1.7 million budget hole this year, politicians considered charging prisoners for toilet paper — at a savings of $2,300 per year. The idea was ultimately dropped, after much derision.
A New Jersey legislator introduced a bill similar to New York’s, this one based on fees charged by the Camden County Correctional Facility, which bills prisoners $5 a day for room and board and $10 per day for infirmary stays ? totaling an estimated $300,000 per year.
In Virginia, Richmond’s overcrowded city jail has begun charging $1 per day, hoping to earn as much as $200,000 a year. In Missouri’s Taney County, home to Branson, the sheriff says charging inmates $45 per day will help pay for his new $27 million jail.
In Arizona’s Maricopa County, which includes Phoenix, Sheriff Joe Arpaio calls himself America’s toughest sheriff and makes prisoners sleep outdoors in 100-degree-plus heat.
There was a pretty good in-depth profile in the New Yorker of Sheriff Arpaio recently, for anyone interested. It covered both his perceived pluses (his toughness, his anti-immigration stance) and minuses (constant spotlight-seeking, bullying tactics). He is unapologetically enthusiastic about his policies, I’ll say that much.
Er, by the time wealthy criminals get to prison, they are usually broke.
This is nothing more than “feel good” legislation and more direct evidence that our prison system is based on profit and not punishment and certainly NOT reform.
Mmmm, green bologna!
TEE HEE!!
Tedisco? Consider the the source of the pandering BS.
This seems like a bad idea. A lot of prisoners are indigent and can’t pay anyway.
“Sheriff Joe” is the worst kind of grandstanding politician-in-uniform. What purpose is served by making prisoners wear pink underwear? It’s petty humiliation. The state should be above that sort of thing.
You’re right Sammy.
I say bring on the humiliation. The more miserable you make it for them, maybe the less likely they’ll be back.
Their lack of self esteem due to their criminal behavior is not my problem.
Bring on the pink underwear, and maybe even make them wear it outside their uniforms.
Except for one thing: A large amount of them are otherwise peaceful people in jail for victimless crimes. Sherrif Joe treats those people the same as the ones who initiate force.
For that, I despise Joe and count him among the violent criminals.
Please remember, this is a jail, not a prison. Many here are awaiting trial, and as such are not guilty, at least not yet.
“The state should be above that sort of thing.”
Bigtime. Ignorance like Tediscos and Arpaio does nothing to advance justice or reform. It merely panders to the ignorant plenty-plaints and self-righteous slobs.
What people don’t seem to realize is that most of these guys are going to be rejoining society at some point. If you have an environment that’s completely dehumanizing, you’re going to create monsters over time. Don’t get me wrong - I’m no bleeding-heart liberal - but the State has certain responsibilities to the people it incarcerates, such as creating an environment where they won’t go completely mad. Those who genuinely want to change their ways - a small miniority - should be given the help they need, or they don’t stand a chance once they re-enter society.
In my county in Ca. people pay to not go to jail. Anyone with a sentence of less than 90 days can pay $12 per day to pick up litter or whatever. More than 30 days less than 90 you can pay $35 a day for home detention. Don’t know if it actually covers the cost of administering the programs, but it does help with jail overcrowding.
U.S. Bank Failures Rise to 72 With Collapses in Florida, Oregon.
“Regulators are closing banks at the fastest pace in 17 years as losses mount from unpaid real-estate debt”.
Aug. 8 (Bloomberg) — U.S. bank failures rose to 72 this year with the collapse of two lenders in Florida and one in Oregon amid the worst economic slump since the Great Depression.
Regulators shut First State Bank and Community National Bank, both based in Sarasota, Florida, and Community First Bank in Prineville, Oregon, the Federal Deposit Insurance Corp. said in statements yesterday. The FDIC was named receiver. Closing the lenders, with combined assets of $769 million and deposits of $662 million, will cost the deposit insurance fund about $185 million.
The FDIC is offering to share losses with potential buyers, reviving a practice used during the U.S. savings-and-loan crisis in the late 1980s.
Stearns Bank of St. Cloud, Minnesota, will assume almost all deposits of the Florida banks, the FDIC said. First State, the biggest of the three failures with $463 million in assets and $387 million in deposits, had nine branches along Florida’s Gulf coast that will open Aug. 10 as Stearns branches, according to the FDIC.
Community National’s four offices will open under the Stearns name, the agency said. Stearns is paying a 0.25 percent premium for Community National’s $93 million in deposits and the FDIC is sharing losses on most of the $545 million assets being acquired from the two failed lenders.
Home Federal Bank in Nampa, Idaho, is buying most of Community First’s $182 million in deposits and 94 percent of its $209 million in assets. The FDIC is sharing losses on $155 million of assets in the deal. The eight branches of Community First will reopen on Aug. 10 as offices of Home Federal.
The FDIC, based in Washington, insures deposits at more than 8,200 institutions with $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 when a bank fails. This year’s failures have cost the insurance fund more than $15 billion.
“Regulators are closing banks at the fastest pace in 17 years as losses mount from unpaid real-estate debt”.
I thunked the crisis was over, and there was never a better time to buy a house than now. What gives?
For those readers here who are not fortunate to be able to engorge themselves at the Wall Street bonus trough, I am wondering if you are seeing signs of economic improvement in your area? I am seeing myriad small signs of quite the opposite:
1) The blood bank where I donate used to hand out all kinds of perks (baseball tickets, free meal coupons at area restaurants, free T-shirts, etc). My blood donation yesterday was rewarded with only the pride of doing the right thing for the community.
2) Back in the summer of 2005, the walls of Petco Stadium (where the Padres play ball) were covered with real estate adds (KB Homes, Countrywide Lending, Accredited Home Lenders, New Century Mortgage, etc). At Friday night’s game, the only vestige of this advertising bonanza in sight was a modest Wells Fargo bank sign.
3) A church which used to pay me over a hundreds dollars at a shot for my musical contributions now pays me with fresh-baked bread.
4) Other contract work which I used to rely on for a source of long-term savings has dried up.
5) On the plus side, traffic is almost always manageable around San Diego these days, even during peak rush hour driving time.
Geez the Lockheed blood bank only gave out cookies and fruit juice.
Funny story. Lockheed M&S in Sunnyvale had an indoor 50 yard shooting range for the employees. As it was a large room with no furniture, they also used it for blood drives. They used to announce over the intercom “today is blood drive day - any employee wishing to donate blood please report to the rifle range!”
Didn’t William Foster (the Michael Douglas character in “Falling Down”) work at Lockheed?
“…cookies and fruit juice.”
Sorry — forgot to mention that. But the cookies contained high fructose corn syrup, so I avoided them.
Totally Wow, from the Great Prof. B. Who knows what is going on.
I am seeing myriad small signs of quite the opposite:
My truck driving friend Jim told me his company just cut their driver’s per-mile rate by 20%, although other compensation (e.g., detention time) has stayed the same. He thinks it’s due to lack of business for his company, diesel fuel is cheaper by almost 50% from a year ago at this time. He intends to make up for the cut in pay by increasing his time on the road. I don’t see how he can drive an extra 25%, since he takes very little time off as it is.
Improvements? No. Although the slide is long and slow here in Houston, it is visible. A new Goodyear shop, a Wahmu and a new auto parts store closed in my area and I live in a nice area.
Several LARGE (think 5000+ vehicles on site covering 10+ acres) dealerships have closed. This says something in a city where a car is an absolute necessity.
A lot of retail space has been sitting empty for almost a year. I’m also seeing a few houses that are empty but with no signs in the front yard.
My business is somewhat stable, but erratic. In other words, breaking even but a roller coaster ride at the same time.
Still literally thousands off layoffs ongoing, but the only way to tell that retail is off is by the published numbers, because it seems pretty busy every time I go shopping.
Rents haven’t dropped. In fact it seems to be going up! New apts in my area are running $800 for 600sqft and $1100 for 1075sqft + utilities. Granted, they aren’t ghetto, but I can rent a damn 3 bdrm house for that kind of money! Who the hell do they think they are going to lease to? The thousands of folks that just got laid off from the several national corporations around here?
Yet over a 1000 units (probably a lot more) have come on-line within the last 6 months and all within a 5 sq mile area. Gonna be brutal when reality sets in.
Overall, though, Houston is in far better condition that what I’m hearing and seeing in the rest of the country, but we’re still getting plenty of pain.
Thanks for sharing that too eco. Like you said, this hand may be quasi-invisible now, but watch it slowly materalize.
What is the sound of an invisible hand spanking?
‘no one could have seen it coming!’
I see less traffic on the roads.
Even during ‘rush hour’ in the desert, ya know when the turtles, snakes, and lizards cross the road. And the coyotes amble across the yard.
As indicated above, WAman’s lookin to buy a shack and I’ve read about quite a number more actively looking and making offers over the past 4 months.
So ya’ll come out of the closet now and announce it…. who’s ready to pull the trigger?
We have 3 REO shacks in SussexCo Delaware lined up for a look on Labor day weekend. I might even call a realturd to let us in legally.
To clarify, Prof. B. knows what is going on.
Congressional Budget Office says expanding preventive care may increase overall health care costs, rather than cut them.
Enslave the healthy to pay for the medical care of the unhealthy.
Seriously, my oldest sister has been obese all her life and has been averse to going to doctors. She is 56 years old. She has an amazingly positive attitude and has two adult children from her divorce living with her. She has a low income. She never told me what she makes but judging from her location and profession I could guess.
Because she’s family, I’m anticipating I will throw money into a medical situation for her when it happens. I don’t want anyone else to be footing the bill - (read taxpayers). I’m deadset against socialized health care.
The mind boggling thing is that in the founding years of our Republic, we could have just as well decided to keep dying people alive at all costs and tax the healthy to pay for the dying. But we didn’t. Could have done the same 120 years later. But we didn’t.
Why do we think it is important for the healthy to subsidize those who are unwilling to exercise or eat right? To subsidize the health care of, say, motorcyclists on respirators when they should have driven cars instead? Where does this end? The total enslavement of the productive class and healthy class.
I’m deadset against socialized health care.
So, will you refuse medicare?
“”Although different types of preventive care have different effects on spending, the evidence suggests that, for most preventive services, expanded utilization leads to higher, not lower, medical spending overall,” Elmendorf wrote.”
But how much of that initial increased cost is simply due to finding things that went undiagnosed due to lack of proper past medical care, things that will cost money to treat?
The same thing could happen if you were to take an older vehicle that hasn’t been properly maintained to a mechanic. You’re going to find things that need repairs, some sooner and some later, and those repairs will cost money.
Longer term, good preventative care coupled with efforts to encourage people to adopt healthier lifestyles should save money and result in better health. But short term, I wouldn’t be surprised if costs are indeed higher.
Big Mortgage Company Closes.
One of the nation’s largest mortgage companies, Taylor, Bean and Whitaker, unexpectedly shut its doors for good, leaving thousands of people in the dark about how to keep paying their mortgages.
The company has an office in Las Vegas. Their Las Vegas office is one of about 25 the company has across the nation. But after reportedly having it’s headquarters’ in Florida raided by federal agents earlier this week, it now appears the company is closed.
“By appointment only” is what the sign on the local office reads, but it now appears they’re appointments that will never be. “I sent a majority of my business to them. They were a very good company. They were easy to deal with. So when I heard the news, I was shocked,” said Bruce Singer with L&G Mortgage.
As the twelfth largest home-loan company in the nation, Taylor, Bean and Whitaker has shut its doors amid allegations of possible fraud. The government stopped the company from handling FHA loans only days ago. “Their wholesale branch or division has closed down. They are no longer accepting loan originations,” said Singer.
Bruce Singer has dealt with the mortgage company in the past and says many who are still dealing with them may be left with a lot of questions. But he says for now, they’re all answers left up in the air. Still, he recommends those who have loans with the company to keep paying as they normally would.
With the lending market still very tight, the shut down of a company of this size could prove costly. “It just means there’s one less bank out there that’s doing loans, so there’s less and less competition,” he said.
The company sent out an e-mail to it’s employees saying they did everything possible to try to save the company, but in the end they just couldn’t.
Mexican trucking industry has shrunken due to decline in exports from Mexico to USA. “Cargo has fallen by 50%. If the economy of the United States does not recover quickly the consequences for us will be disastrous. We are on the road to mass unemployment.” says Luis Moreno Sesma, General Manager in Nuevo Laredo of Canacar, the Mexican truck owners’ Association.
Alright, all of us on HBB should be arrested for not consuming. Why, we must be anti-American to not support Wall Street! Okay, I’m sarcastic.
http://tinyurl.com/mhry3n
It will be a long time before Americans spend frivolously again. Unemployment will stay European double digit style until we reverse the Europeanization of American economics.
I’m still expecting this stock market since March 9 will be canceled out in the next three years. That bodes well for dollar cost averaging.
Agreed. If you’re not buying equities and you’re able to (employed), you will regret it.
I interpreted his statement to mean that the GAINS since March 9th will be cancelled out.
What in that forecast should make me want to buy equities???
Daddy Warbucks, go ahead and buy us all something. The rest of us are saving, not spending.
Frank Rich was interviewed last Monday and I caught the repeat today. It would seem he agrees with me, and the rest of us, at some point the American citizen should have been asked to sacrifice, over 7 yrs ago. And our elected officials are wimps and didnt’ tell the citizens straight up. The only caveat being, that IF the elected officials ALSO sacrificed, then ‘you and I’ would have done so, but we were asked to go shopping and to Disneyland, and our elected officials continually give themselves raises even and especially during these times.
WASHINGTON/CHICAGO (Reuters) – Former U.S. Treasury Secretary Henry Paulson talked often to the head of Goldman Sachs at the height of the credit crisis but did not actively seek to help the bank he once ran, a spokeswoman for Paulson said on Saturday.
The New York Times on Saturday reported records of two dozen conversations between Paulson and Goldman chief executive Lloyd Blankfein the same week last September that rival bank Lehman Brothers collapsed and insurer American International Group — closely connected to Goldman — was rescued with public funds.
Goldman was a major beneficiary of the AIG bailout, receiving nearly $13 billion in counterparty payments ultimately funded by taxpayers, according to AIG disclosures in March.
Sure Hank
http://www.schifftruth.com/
Peter Schiff’s bid for Chris Dodd’s Senate seat is off to a roaring start - thanks to a Ron Paul style money bomb, with donations from fed-up, awakened Americans rejecting the Republicrat Establishment and its insane bailouts, Peter raised raised $783,000 since August 7th - more than any other GOP politician.
Chris Dodd is a poster boy for bad governance and a major villain of the housing bubble. Please watch this brilliant video comparing Dodd’s 2006 assurances that all is well, with Schiff’s stark warning of what is coming. It would send a seismic shock through the corrupt, venal Republicrat establishment if this principled and intelligent candidate takes Chris Dodd’s Senate seat with support from the grassroots, not the banksters that bought and paid for Chris Dodd and just about every other Establishment politician.
Sammy, the Peter Schiff candidacy is a very positive sign. I’m also excited about Rand Paul’s potential run for Senate. These are good people and I hope there will be many more of them. Decent, intelligent folks with the best interests of the country and citizens at heart.
We would have all kinds of good people run for office if we
had serious campaign finance reform, oh yea, where is Mr Mccain?
just 6 dollars dot org.
Any decent campaign reform must include public financing. Otherwise, only the wealthy could run for office.
http://www.youtube.com/watch?v=2I0QN-FYkpw
Peter Schiff was right.
Damn, FEED is still below $6.
It might be a while before Combo returns.
Health care! My, my, my, when in the world did it become necessary to have insurance to cover your health costs!
When I was in high school, in San Diego, my parents did not have health care, and , yet, the doctor would come to the house , and my father would hand him $5. When I went to the Doctor’s office, it cost $3 for an office visit!
Now, let’s not get all upset now, folks, $5 was a day’s wage, in San Diego, for an aircraft mechanic, and the part’s store clerk, made $22 a week for 5 1/2 days work.
In 1952 when my first child was born, it cost me $600 for my wifes 5 days in the hospital, which we paid in advance. $600 was 2 months wages for me!
then came medical insurance, and my doctor, in 1966 raised his office visit from $7 to $15 to cover his costs for being the medical group!
Now my wife and I pay $600 a month for healh insurance, and my daughter pays $2,000 a month for her family!
Would we not be better off to let the medical insurance go, and try to go back to paying for the services in cash!
Jack
IN 1952 when you had a heart attach they gave you morphine and oxygen. When you got cancer they gave you morphine. When you had a stroke they put you in some dirt and paid someone to water you. When you had diabetes you just had to guess what your blood sugar was. When you got an infection you had a small number of antibiotics.ect ect
Is your point that a cash for medical services system wouldn’t work because the procedures and treatments of today are too expensive compared to the past? Doesn’t someone still have to pay for the procedure whether it comes from a pool of $ at an health insurance provider or the government?
How about we go back to the cash for services system and if you don’t have the money, you don’t get treated?
Maybe Insurance companies could be restrict their gambling on health care to catastrophic care like strokes, cancer, etc.
No one is entitled to health care. I had to fork over $1100 in recent years to my dentist for a crown since I had no dental insurance. Ya know what, I gladly did it. Why not? It’s my health and what else you going to spend money on if you don’t have your health.
If treatments are overly expensive because they are too exotic and therefore cannot be paid for with cash then maybe they don’t need to exist?
Nature is the ultimate health care plan. You get too sick, you DIE! The rest of the heard is healthier for it.
Bad sentence. Anger does that.
Maybe Insurance companies could be restrict their gambling on health care to catastrophic care like strokes, cancer, etcMaybe Insurance companies could restrict their gambling on health care to catastrophic events like strokes, cancer, etc
Now get out there and consume…
Market rally, economic growth depend on consumer.
After improvement in housing, unemployment, investors look to consumer to drive growth.
NEW YORK (AP) — Now that housing and even unemployment are showing signs of improvement, Wall Street wants consumers to do their part to heal the economy.
Investors get some insight this week into how consumers are spending from a government report on July retail sales. They’ll also find out if consumers helped major retailers including Wal-Mart Stores Inc. and Macy’s Inc. join the stream of companies that reported better-than-expected second-quarter earnings and forecasts.
“What we’ll see now is close attention to consumer behavior,” said Joe Heider, president of Dawson Wealth Management in Cleveland.
Analysts say investors need to see evidence that consumer spending is picking up before they’ll keep the market’s summer rally going. Despite signs the recession is easing, investors are still worried that consumers, whose spending accounts for 70 percent of all U.S. economic activity, could hurt the economy’s chances for a robust recovery if they continue to limit what they buy.
The stock market has soared in the last month as reports showed steady increases in home sales, improving corporate earnings and a stabilization in the manufacturing industry. On Friday, investors cheered an unexpected dip in the unemployment rate.
i thought it was busy as hell at Costco yesterday.. got lucky saw a car backing out and i snatched a parking spot closer to the front door than ever before in history…
store was really crowded compared to the last year or so.. but at the registers there were few carts. Average maybe 3 or 4 deep.
Since there were LOTS of kids around, I think maybe Saturday afternoon cruising Costco is a new sort of cheap family entertainment.. Go for a ride .. Look and play with stuff it’d be nice to own.. grab a very good $1.50 hot dog and a coke. Kill a few hours..
Or maybe it was because Costco’s got the cheapest pharmacy prices around. You don’t even have to be a member to make use of the Rx counter, and you’ll pay less than you would even at WalMart [unless it's one of their $5 specials], especially on generics.
don’t need to be a member? I never used the pharmacy and didn’t know that.
Don’t need to be a member to get a hotdog either, now that i think about it. I wonder if the hearing aids and eye doctor things are the same. Maybe even the auto-care garage. I’ll ask next time i’m there.
It seems Costco is always jammed. At least based on my observations in western CT. Their sales and profits are down though.
Don’t forget, free samples of food.
BTW you do need to be a member for the tires at Costco.
hmm…. free food.. thought provoking..
btw, i recall a few vacation photos of people square dancing on the great wall.. gotta be tucked away in a family album somewheres.
That is cool joey. Hold onto those pictures.
Yep.
Out here in the desert at the costcos we call it
Seniors Lunch.
During high season, those old retired men are something else.
You can get your foot stomped on, yourself pushed over cause those geezers really get in their to get theirs.
Old wealthy bored bast ards!
Desert,
Did you get my email?
Yesmam, emailing you back now!
Here’s proud conservative and former GOP speechwriter David Frum on the prospect of defeating healthcare reform:
The problem is that if we do that … we’ll still have the present healthcare system. Meaning that we’ll have (1) flat-lining wages, (2) exploding Medicaid and Medicare costs and thus immense pressure for future tax increases, (3) small businesses and self-employed individuals priced out of the insurance market, and (4) a lot of uninsured or underinsured people imposing costs on hospitals and local governments.
We’ll have entrenched and perpetuated some of the most irrational features of a hugely costly and under-performing system, at the expense of entrepreneurs and risk-takers, exactly the people the Republican party exists to champion.
[...]
Even worse will be the way this fight is won: basically by convincing older Americans already covered by a government health program, Medicare, that Obama’s reform plans will reduce their coverage. In other words, we’ll have sent a powerful message to the entire political system to avoid at all hazards any tinkering with Medicare except to make it more generous for the already covered.
If we win, we’ll trumpet the success as a great triumph for liberty and individualism. Really though it will be a triumph for inertia. To the extent that anybody in the conservative world still aspires to any kind of future reform and improvement of America’s ossified government, that should be a very ashy victory indeed.
bah.. both sides are fighting over money.. who’s gonna pay through the nose, and who’s gonna pay even more.
Nobody’s even thinking about reducing the cost of healthcare. The cost a bandaid applied by a nurse.. of a titanium pin pushed into a broken bone.. cost of a night in ICU.
Until we attack and reduce the actual cost of care, the costs to us (including insurance rates) will remain too high. The only thing that may change is how the cost of running an inefficient system and it’s wasteful expenses will be distributed among us.
here’s one..
i have mentioned my homeless friend in san francisco before..
Well, he caught pnemonia a few weeks ago.. was sleeping in a friend’s room and felt too hot.. opened a window, went to sleep and woke up coughing and in pain and with a fever. About a day later was in fear for his life.. has no wheels so called 911, and an ambulance takes him to SF General.
So they give him fluids and analgesics.. did some Xrays of his lungs.. were going to do a biopsy of a dark spot they saw but decided not to.
He’s an addict and had Hep-C forever and i imagine that might’a cost some extra… said the nurse couldn’t find a vein for the catheter..
Spent 3 days in there before he left on his own to go to work. Work told him he looked like hell so he didn’t work until the next day.
He got the hospital bill a couple days ago.. $54,000. Ambulance ride was only $1,200 or so if i recall.
And we all pay for it anyway. Shoulda coulda whoulda been nice to get him care when it would have done him some good- and cost a lot less. And we all pay for it anyway.
hey.. it cost $54,000 freakin bucks. No comment about that?
Think it’s a fair trade? Three days in a hospital bed for 2009 BMW M3?
You completely missed the point of my posts.. Why is the argument about WHO PAYS instead of about the outlandish costs of care?
Have we completely surrendered to the idea that healthcare cannot be less expensive than it is? That no amount of ingenuity or industry can lower these costs?
amen sloth. earlier woulda been lots cheaper. LOTS cheaper.
..amen sloth. earlier woulda been lots cheaper. LOTS cheaper.
why is that? cause he’s a junkie?
Go check the price for … hmm.. lets pick something really common. I know.. Check the price for the same treatment for someone who’s diabetic. Think it’ll costs less than for someone with hepatitis?
BS, joey.
bs it’s bs..
Do you think anyone making their living in the healthcare industry actually wants to reduce the cost of care? Drug companies.. hospitals.. doctors nurses.. insurance companies.. medical suppliers.. anyone?
If so, name one who’s willing to take home less money.
If there is no such animal, the entire industry is the enemy of the people in this struggle, and whoever you side with is an enemy.
Another tacit acknowledgment that the GnoP has no intent to advance a solution……. and stated as such by a GnoP spokesman.
Surprised?
Aha — an honest conservative.
I knew they were hiding out there somewhere in the U.S.
Hopefully the Republican party will expire, so they can start a new one.
amen wt amen.
They are out there somewhere.
About 250 Inmates Hurt In Riot At Chino Prison
CHINO, Calif. (AP) ― A prison riot at the California Institution for Men in Chino has injured several inmates. (File Photo)
A California state prison near Los Angeles remained on lockdown after a riot sent 55 prisoners to hospitals.
A switchboard operator at the California Institution for Men in Chino said the lockdown Sunday would remain in effect “indefinitely.”
Prison spokesman Lt. Mark Hargrove said 80 officers responded to the riot Saturday night, which involved some 1,300 inmates in seven barracks at the prison, which is about 35 miles east of Los Angeles. The uprising lasted for about four hours, and at least one unit caught fire.
More than 250 inmates suffered injuries ranging from stab wounds and slashes to head trauma. Some injuries were considered life-threatening.
No prison staff members were injured.
Conveniently just in time to scare everyone into paying more taxes.
Test
Test :confused: :conf:
no
ET, I’m having a moment. I am asking you because presumably we’re are cut from similar cloth. I have done nothing artistically significant in the last few years. How do you mix it up when you get writer’s block?
Are you talking writing specifically, or creative output in general?
With writing, and perhaps other modes for other people, I think there’s a inspiration component and a more mundane, workaday element to creativity. Sometimes you have to plod along systematically, so that the creative muscles are still firing through the dry spells. And sometimes that plodding leads to new insight. I’ve heard Nick Cave takes this approach to songwriting — he puts himself in an office and writes every day, like it’s a 9-to-5 job.
Having said that, I haven’t been able to make much music in the past couple of years. Too much goin’ on. In my rare chances, though, I find being around other musicians who inspire me makes a huge difference.
Oh, one more thing: if you have different creative avenues you enjoy (music and photography, for example), sometimes it helps to just wander off into the other subject and muck around for the sheer joy of it. Sometimes the brain just needs a new direction.
Good suggestions ET, all good ideas. Then there is another one, indulge in a really bad/good sci fi, or detective book.
Something cheap and easy to read.
Here’s some evidence that whales in the financial sector have not yet killed off all the plankton:
Financial Times
Banks make $38bn from overdraft fees
By Saskia Scholtes and Francesco Guerrera in New York
Published: August 9 2009 22:52 | Last updated: August 9 2009 22:52
US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s, according to research. The fees are nearly double those reported in 2000.
The finding is likely to increase public hostility towards the financial sector, which has been under political pressure to ease the burden on consumers by increasing credit availability and lending more fairly after being bailed out by taxpayers.
…
“The fees are nearly double those reported in 2000.”
Leeches will suck blood. And with blood in the water, sharks will engorge themselves. The financial sector is heavily populated with sharks and leeches who ruthlessly prey on the American people.
Bernanke and Geithner are parasite enablers.
was you ever stung by a dead bee?
to own and own not
Why would you get an overdraft fee?
Is it not because you have no money of your own and are essentially borrowing the bank’s money?
…and yet, somehow, you fault banks for lending to these suffering people, even though some percentage are surely gonna lose their jobs and not repay the bank..
Would you prefer banks simply refuse to allow overdrafting, and let the rent check bounce?
Or are banks charities who should give people whatever money they need at no charge. No! don’t answer that! I can’t hear you i have my hands over my ears i can’t i can’t hear you i am not listening i can’t hear you..
Joeyjoeyjoey,
“Or are banks charities who should give people whatever money they need at no charge.”
My impression is that they are more like parasites who hand money to people who are not all that likely to be able to repay it, knowing that they will nonetheless be able to profit off the average planktonite.
LOL, I am eyeballing this house in upstate, NY. I wonder if they moved already?
http://tinyurl.com/ksc5m6
YOU’VE BEEN GOOGLED!
Muggy, that is a sweet house. Honeoye Falls looks like a nice little town as well. Hope you get something at least as nice for lesser price when you’re ready to go. $170K is still a lot of money when there is more supply than demand, though to be sure it is a lot more reasonable than CT or DC area, the places with which I am most familiar.
jane,
Are you still in CA?
Foreclosure wave gathers momentum
August 6th, 2009, 2:00 am · 130 Comments · posted by Mathew Padilla
(Update: More explanation on second-wave theory.)
There is no second foreclosure wave coming, says Sam Khater, senior economist, First American CoreLogic.
“To say there is a second wave implies the (current) wave has receded,” Khater told me. “I don’t see that the wave has receded.”
Khater shared his historical data of 90-day delinquency rates for Orange County, as well as the foreclosure-in-process rates and rates of REOs, or foreclosures on banks’ books. The 90-day rate includes all outstanding first mortgages at least three months late but not yet foreclosed. The foreclosure rate is just first mortgages with a notice of default or trustee’s sale filing. (Previously the person who distributes the report for First American told me the two rates did not overlap, but Khater, who compiles the data, said they do.)
If you look at the 90-day rate it has been heading straight up — it has not receded.
That piece is from the OC Register’s Mortgage Insider by Mathew Padilla
“The 90-day rate includes all outstanding first mortgages at least three months late but not yet foreclosed.”
From the graph, it looks like that 90-day rate was at about 0.8% as of the start of 2007. The current rate is about 6.5%, and it is trending steadily higher. Is this the highest ever on record for the OC, or did it get this high at some point in the past? And what does it portend for the future foreclosure rate (can’t be good, whatever it is…)?
Mathew also has a link and discussion to an updated version of the famous Credit Suisse reset chart. Take home conclusion: No significant tapering of ARM resets is due until after spring 2012.
We got a “supplemental tax bill” (actually a notice) informing us of our new tax status in regards to the house. To be exact, this is a notice reflecting the drop in price– about $115K since 2003.
That’s about a 40% drop* from a price that was two years before the peak, and before the frothiest part of the bubble.
Oh, and the Neighbor Who Knows Everything has notices from around the neighborhood from when houses were up for sale. The next court over had two houses go for over a half-mil. These are 3/2, 4/2 houses below 2000 square feet on lot sizes that don’t even hit a quarter-acre in a suburban community!
Good grief.
*You can pretty much figure out what we paid from that. And yes, we can afford that by traditional metrics.
Whoa,
Wild Wild West is on KOFY TV 20 right now. Really liked Ross Martin and all his characters he portrayed.
i learned a word..
Steampunk: a sort of Victorian era / steam or spring powered era science fiction genre to which W-W-West supposedly belongs..
..”The one memorable recurring arch-villain was Dr. Miguelito Quixote Loveless, a brilliant but megalomaniac dwarf portrayed by Michael Dunn.”
wikipedia
been so long since i saw one i’d forgotten about the midget bad guy..
Little people joey, little people
BTW I also enjoyed all the gadgets they used on the show. You could say Artemus Gordon (Ross Martin) was the original geek or nerd portrayed on TV.
Is it too late already to cash in on the ginormous debt cat bounce in stock prices?
Wall Street Journal
* ABREAST OF THE MARKET
* AUGUST 10, 2009
Debt Burden to Weigh on Stocks
Consumers’ Inability to Drive Economic Growth Likely to End Big Gains
BY E.S. BROWNING AND ANNELENA LOBB
Economists are boosting growth forecasts. Employment numbers are improving. Manufacturing activity is bottoming. Housing demand is strengthening. Business leaders are starting to say the worst may be over.
Markets are celebrating, hoping the good news will keep on coming.
But there is a smudge on the picture. A surprisingly large number of money managers and economists are warning that, despite the hopeful signs, the economy is still deep in the woods, not strong enough to support a long-running stock and bond recovery.
The Dow Jones Industrial Average now has jumped 43% from the 12-year low hit March 9.
…
who wears short-shorts?
(the only thing that worries me is I’m not alone)
or maybe I am
carthago delenda est
unless they find my suitcase
You are not alone alpha. I’m still haning about.
Some of the statistics provided in this article are jaw droppers, even to a long-time real estate bear.
Wall Street Journal
* REAL ESTATE
* AUGUST 10, 2009
Vacancies Suppress Southern California Recovery
By JIM CARLTON
ONTARIO, Calif. — One drag on recovery in Southern California is illustrated by three new office buildings near the LA-Ontario International Airport. One is 60% leased. The other two sit empty.
A home-construction site near Riverside, Calif., stands idled in February. In Southern California’s San Bernardino and Riverside counties, housing permits have plunged 96% from 45,299 in 2005 to a projected 2,000 this year.
While real estate is in a funk across the U.S., Southern California’s economy is more reliant on the construction than many other places. So until these vacant buildings and hundreds of others like them fill up, the prospects for a rebound in construction and the broader economy here are bleak.
At its peak four years ago, construction was the fourth-largest employer in the Inland Empire counties of San Bernardino and Riverside, according to Jack Kyser, chief economist at Los Angeles Economic Development Corp., a nonprofit research group. The housing industry contributed more than $24 billion in revenue to the Southern California economy in 2008, or more than double the U.S. gross revenue from Hollywood movies(!!!), according to the Building Industry Association of Southern California.
Much has changed. “New construction is now literally stopped,” said Katherine Aguilar Perez, executive director of the Urban Land Institute’s office in Los Angeles. The industry has shed jobs as new building starts have plummeted.
The greater Los Angeles area has lost about 90,000 construction jobs, or about 15% of the total in the past year, more than any other metropolitan area, according to the Associated General Contractors of America. The Inland Empire, east of Los Angeles, has lost about 60,000 construction jobs since 2006, or 49% of its total, according to John Husing, a consulting economist in Redlands, Calif.
Meanwhile, the number of housing permits in the five-county greater Los Angeles region has dropped 85% from 88,187 in 2005 to a projected 12,990 this year, Mr. Kyser said. The fall has been even steeper in San Bernardino and Riverside counties, where housing permits have plunged 96% from 45,299 in 2005 to a projected 2,000 this year, said Mr. Husing.
Even big builders have suspended much of their work. Lewis Group of Cos., for example, says it has put on hold two big master-planned communities: the 1,100-home Shady Trails in Fontana, where fewer than 300 units have been completed, and the 8,000-home Preserve in Chino, where about 1,300 homes have been completed. “We’re going to going to just wait until we see a recovery,” says Randall Lewis, executive vice president of the Upland, Calif. developer.
As a result, construction won’t be poised to play its frequent role of leading the region of almost 25 million people out of the recession. “It’s going to be difficult this time, because it won’t be one sector you can point to lead the way,” Mr. Kyser said.
…
The luxury home market is becoming a key indicator of market distress these days. This story serves nicely to show just how extreme California real estate inflation was from the early 1970s (when the US abandoned the gold standard) to the present.
Wall Street Journal
* HOME FRONT
* JULY 31, 2009, 9:48 A.M. ET
A Castle by the Sea
After a decades-long renovation, a historic home in Laguna Beach hits the market
By SARA LIN
Laguna Beach, Calif.
In 1973, Roger Jones convinced his landlord to sell him the guest house he lived in and the accompanying beachfront home for $420,000—a hefty sum for a 33-year-old electronic-parts salesman making $35,000 a year. “I was as scared as hell,” says Mr. Jones.
…
In May, Mr. Jones, now 69, decided to sell this home, which he’s painstakingly researched and slowly renovated over the past three decades, for $34.5 million. He says the upkeep and maintenance are too costly for his kids and adds that he and his wife are getting too old to live in a large home. “I’ve always had good luck just buying and selling [real estate] and rolling the dice,” he says, adding he’s hoping to invest the proceeds in a new film venture.
How lucky he’ll be this time remains to be seen. This week the listing agent, Susan Weir of Prudential California Realty, lowered the price of the home and its accompanying guest house to $29.9 million. “I do think it’ll eventually sell. I just don’t think its going to sell for $30 million,” says Sotheby’s International Realty agent Chris Guziak, who said that based on recent transactions in the area he thought the home would likely sell for “at least 25% less” than its current asking price.
…
Cumulative (nominal) capital gain based on the seller’s original wishing price:
(34,500,000/420,000-1)*100 = 8,114%
Annualized gain:
((34,500,000/420,000)^(1/(2009-1973))-1)*100 = 13% per year, over a 46 year period!
Not a bad gain for hanging on to a beach home for 46 years — now I know why they say California real estate always goes up, in the long run. Of course, it won’t look quite that stellar if he has to drop the price to 25% below $29.9 million to sell (0.75*29.9 = $22.4 million).
The global economy is still showing signs of local (national-level) froth. Didn’t Hank Paulson give the Chinese financial advice over the past decade or so? In light of this, I guess there are no surprises here…
Asia Markets
Aug 9, 2009, 11:49 p.m. EST
Shanghai acting like it’s 2007 again, analysts say
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Early warning signs suggest a bubble could be building in China’s stock market, although it’s too early to know whether this warrants an immediate exit from Chinese equities, analysts said in a recent research report.
Credit Suisse analysts cited similarities between the Chinese share picture today and that prior to the Shanghai Composite’s topping out above the 6,000-point level 22 months ago. That top marked the start of a steady drop to below 1,750 by late last year.
Specifically the broker pointed to an economy glutted with excess liquidity, a surge in openings in stock-trading accounts, and a turnover-to-market-cap ratio that was nearing 2007’s level.
The Chinese stock market “is clearly expensive now, but has not yet reached a full-blown bubble as in 2007. If a healthy market correction does not happen in the next few months, and the market continues to surge ahead, fundamental investors should start to worry,” analysts headed by Vincent Chan said in the note, released Friday.
The brokerage cautioned excess liquidity, as gauged by the amount of cash and equivalents and the rate of economic growth, was now more abundant that at any time since the early 1990s.
“This lays the perfect foundation for the building up of an asset bubble,” Chan said.
…
Maybe a little more insight into another Scotsman’s vocation ……?
Go-to guy on foreclosure cleanouts sees it all
By TODD LEWAN (AP National Writer)
From Associated Press
August 08, 2009 12:58 PM EDT
GROVELAND, Fla. - 393 Ed Douglas Road was a hot potato now, not a home - just another ghost property in the resale pipeline with curtainless windows, a yard populated by fire ants and weeds, and the telltale flier taped to the front door: “U.S. Government Property.”
Nick Hazel shoved a key in the lock.
“Don’t look now, but we got company.” Above his head, and along the eaves, dangled nests in plump, grapelike clusters. “Hornets,” he muttered, then with a forced grin, “I looooove hornets.”
The door opened with a yawn. There was a bare foyer and beyond it a living room, cool and hollow, with the restful atmosphere of a funeral chapel and something of the same smell.
A queen yellow jacket floated in, nonchalantly, then drifted off into a bedroom.
Hazel leaned his mop against a wall, then walked the joint.
A broken dishwasher. Check. A countertop range stripped of its coils. Check. Fixtureless showers. Seatless toilets. Missing water heater. Check, check, check. Wires dangling from holes gouged in the ceilings - the work of whoever relieved the place of its fans.
“At least these guys left the wiring,” he said, with a shrug.
Hazel, 40, is a “property preservationist,” which these days makes him a very busy man. With thousands of people defaulting each week on mortgages across central Florida, he’s one of growing regiment of people the banks summon to “trash out” - sanitize and seal up - their foreclosure stockpile.
Among other labors, he mows waist-high lawns. He shoos away squatters. He duels wet rot. He boards up shattered windows. He replaces door locks. And, most often, he trucks away refuse so diverse, profuse and amorphous, that sometimes Hazel must squint to distinguish its components.
In short, it’s Hazel’s job to arrest the decay of a decaying housing market - a profession he likens to another the public views with angst. “It’s like I’m a dentist,” he says. “Nobody likes to see me. But when a house’s teeth go bad, who else is going to clean out the rot?”
His is also a profession with brilliant prospects - in the near future, particularly. In an average week, Hazel inspects roughly 90 structures, secures 20 others, and trashes out between 10 and 20 “REOs” (bank shorthand for “real estate owned”). That’s up twofold from a year ago, when he got his start. He’s had to employ his wife, son and five other men just to keep up.
“I don’t sleep much,” he says.
And so, even as the housing and mortgage crisis ravages lenders, homeowners, real-estate agents and construction crews, Hazel finds opportunity in desperate counties awash in abandoned, moldy structures - a paradox not lost on him.
He’s the last in line to notice the little things that once made a dwelling special to a family. And, as would be the case at 393 Ed Douglas Road, it’s ultimately up to him to trash them.
“You gotta remember,” he says, “I’m also the guy who might help the place mean something to somebody else.”
Hazel speaks about his profession in a frank, unapologetic tone. “I’m not ashamed of what I do, if that’s what you’re asking … Someone’s always got to do the bad work, the ugly work. If I don’t do this job, somebody else will.”
—
Ever open a utensil drawer in a kitchen and have rats leap out?
Hazel has.
Ever crawl around a pitch-black attic, feel a buzzing tremor through the beams, and flash a light on a hornet’s nest big as a 55-gallon drum?
Hazel has.
Ever enter the backyard of a mansion, stroll over to an Olympic-sized pool and notice somebody floating, face down?
Hazel hasn’t yet - though he expects to.
“You hear horror stories from people who do this kind of work,” he says. “I’ve never walked in on any floaters. But this job is pretty much a grab bag; you never know what you’ll be walking into in the morning.”
Indeed, not much Hazel stumbles upon shocks him anymore. Like the “debris” that some Florida evictees leave behind: sex toys, Christmas toys, silverware, Tupperware, false teeth, hairpieces, condoms, baby strollers, dried blood, dead cats, live Dobermans, aquariums with rattlers in them.
Or, what others take with them: a dining room ceiling, the ceramic floor tiles of a den, a bedroom’s wall-to-wall carpet; granite countertops, faucet taps, bath tubs, food-waste disposers, decorative columns, crown moldings, door jams.
Then there are the revelations at the gated-community castles - large, exorbitantly landscaped, with pricey WELCOME mats and 2 1/2-car garages (to accommodate two vehicles and a golf cart) - whose interior walls Hazel finds coated in graffiti.
“You see sprayed lines, words that don’t make any sense,” Hazel says. “It’s not like there are any messages to the banks, or anything. I figure they get mad and this is their way of writing, ‘Screw It.’”
Certain properties defy his reasoning powers. One afternoon, an employee of Hazel’s who’d been sent to inspect a foreclosed on house in Marion County called, and in a bewildered tone said, “Something doesn’t look right here.”
The yard was weed-free, freshly cut. The home was fully furnished, the mail box empty. A new pair of shoes rested neatly on the back porch. And yet, the doorbell didn’t work; the power had been cut. So had the water.
“What do you want me to do?”
Hazel couldn’t make heads or tails of it.
“Change the locks.”
For weeks, whenever Hazel or his workers turned up, they found the lawn in pristine condition. (They’d mow the grass anyway.) The blinds always remained closed, the place dusted. No boot marks, no foreign odors, not so much as a bread crumb on the counter.
The neighbors, when asked, offered only shrugs.
Who could it be? An immaculate vagrant? The owners returned?
Hazel has his own theory. “There are so many houses going into foreclosure that I think the neighbors are taking it upon themselves to tend to these ghosts. Why don’t they admit it? That I couldn’t tell you. The world is full of strange people.”
—
Since 2005, new foreclosures have tripled across the nation, to a record 2.25 million in 2008. This year, more are expected; banks filed to reclaim 1.5 million homes from January through June - up 15 percent from a year ago, according to RealtyTrac, a foreclosure listing service.
In Florida, where flipping houses was once a sport, the collapse has been particularly severe. This year, 1 in every 33 homes in the Sunshine State has received at least one foreclosure filing. (Nationally, the ratio is 1 in 84.) Only Nevada and Arizona were worse off.
When Hazel first got into the trashout business in May 2008, the first wave of foreclosures had already wiped out the flippers, and a second was washing away homeowners with “exploding” loans - mortgages with adjustable-rates that spiked after two years.
At the time, Hazel managed a company that installed cable TV. That job earned him enough to support his wife, Patsy, and two kids, and carry a mortgage of his own. But with service calls and new installs dropping sharply, he began to ask himself: How far would cable TV take him?
“People weren’t ordering a lot of cable. Weren’t buying cars. Weren’t buying squat. What businesses were going to thrive in this economy? Then it dawned on me: I could do foreclosures!”
It didn’t hurt that he could make good money - between $250 and $2,000 a cleanout gross - without having to charm people. And if the economy worsened, which in his mind was inevitable, his business would only grow.
The hours are grueling - Hazel doesn’t enter his work orders into the computer until 2 a.m. some nights - but at least he sets them.
Sunday to Sunday, Hazel rises before the sun, dons his rattiest jeans, T-shirt and fishing cap, laces his thick-soled Timberlands. (”The boots don’t always stop upturned nails - not always, but they help.”) Then, he nudges his 19-year-old son, Josh, awake.
After breakfast - coffee, cream and sugar - they strap into Hazel’s GMC Sierra, an offroader the color of silver birch, flip on the headlights and GPS, and rumble to the first house on their case sheet. Hazel works nine counties across Florida’s midsection.
On a typical day, his dashboard logs some 200 miles. Navigating through rush-hour traffic one muggy afternoon in Kissimmee, he remarks: “This job ain’t for those who hate their cars.” He crushes a cigarette in a chocked ashtray. “You better like fast food, too.”
He likes to start at daybreak. “You don’t want to be in a neighborhood too early, where people don’t know you,” Hazel says.
And some places, he adds, “can be really bad. All it takes is two seconds for your GPS to disappear. Plus, if you have to drill out a door lock or kick down the door, it’s best not to do it in the dark.”
Again, that’s primarily because of the neighbors - not hobos or hookers or junkies looking for a dry stretch of carpet on a cold night.
His son, Josh, explains, “People all come out and sit on their porches and just watch you. One time a kid sat in the same window for two days, just staring at us. It’s kind of like a ‘Finding Nemo’ thing, like you’re in a fish bowl.”
Success, the Hazels will tell you, derives primarily from two things: preparedness and one’s attention to detail.
The Sierra’s gun rack takes care of the first. In it, Hazel crams everything other than a firearm, from jumper cables, wires, hammers, mallets, nails, hinges and silicone tubes, to copper piping, wood putty, drills, propane torches, pipe wrenches and miles of red, caution tape.
And Elmer’s glue. “You be surprised how much of a house you can hold together with that stuff,” he says.
The second quality comes into play during the initial walkthrough. Be it a live wire, copper tubing scavenged from an AC unit, or nails purposefully loosened from a floorboard, “detective eyes,” as he calls them, come in handy.
“I haven’t been stung by any booby traps yet,” he says, “but they’re out there. Stuff happens - no matter whether you’re in a mansion, a condo or a trailer home, stuff does happen.”
—
By the time the Hazels arrived at 393 Ed Douglas, the house that once anchored a family of four had become a dusty snapshot of life interrupted.
To Hazel’s thinking, Dad must have been a Harley-Davidson man, evidenced by the Screamin’ Eagle air-cleaner plate left in the garage. Mom probably wasn’t passionate about cooking - jars, trays, a crock pot, stainless steel pots and pans fill the cupboards.
In one bedroom, presumably a boy’s, a mattress leans against a wall slapped with a first coat of purple paint. On the carpetless slab, a lifeless aquarium. On a closet shelf, a tot’s baseball cap.
A second bedroom, its walls adorned with tiny, sky-blue palm prints and the name, “Holly,” looks more alive. Scratched into the face plates are the words “Mom Loves Me.” There’s a clothes chest, and on top, a pair of bronze colored sandals, size 3-M.
In the far corner sits a draftsman’s table, a ledger on it.
“You can DO it!” reads the cover. Written in crayon, it’s a fourth-grader’s tale of how she persuaded her parents to buy her first bicycle, how she falls down repeatedly learning to ride, then falls no more. On the final page, the family goes bike riding together.
“Cute,” Josh says.
He tosses the book on heap of left-behind objects: a crock pot, camouflage gloves, a Harley-Davidson chime clock, Hot Wheels cars, fishing poles, a satellite dish, a Mickey Mouse lunchbox, beach chairs, baseball cards, a dog bowl, golf balls, marbles, and pictures of “Holly’s birthday party, 7/15/06.”
All headed for the dump.
Hazel is leafing through a leather, King James Bible he’s found on the playroom floor. There’s writing on the first page: “I love you and may every day be a good one. Always ask God if you are in doubt. Love, Mom.”
For the first time, Hazel’s eyes narrow.
“I guess if anything still surprises me it’s that people leave behind mementos, pictures, personal stuff,” he says. “I wouldn’t leave anything like this. But people do it.”
He flicks the Bible in the pile, steps back outside for a smoke, and admires a live oak on the front lawn. Its leaves are brittle, falling. The tree needs a pruning.
“You know, if you think about this stuff all the time, it’ll drive you crazy. That’s why I don’t like doing it. Slows you down.” He checks his watch. It’s after 2 p.m., and he still has two inspections and two cleanouts waiting, 50 miles away.
So, Hazel marches back inside and becomes all business. Clouds of dust rise. Six vacuum filters are exhausted, as are a half dozen jars of cleaners. As the afternoon wears on, he and his allies, Pine Sol and bleach, gain the upper hand.
By 4:02 p.m., the house is trashed out. Hazel is standing on the driveway, peering into the rear of a Wells Fargo trailer he brings along for large debris.
“Room to spare!” He beams. The trailer was only half full. No need yet to stop at the dump; he’d be able to cram at least one more load into the trailer by day’s end.